📊 Score Flirts With Cautious, Settles at 5.16 — 70% Cash Saves You Again
Today was a ride for the score. It opened at 5.17 at 9:05 AM, then started sliding as the morning rally evaporated: 5.13 by 10 AM, 5.12 by 11:23 AM, and then hit the session low of 5.11 at 1:48 PM — right as the S&P was giving back all of its morning gains.
That 5.11 reading is significant: it crossed into Cautious territory (40% SQQQ / 60% Cash), meaning for a brief window the model was saying "don't just sit in cash — get short." The model was smelling the afternoon reversal before it fully played out.
By close it recovered to 5.16 (Neutral: 30% QQQ / 70% Cash). The trajectory this week tells the whole story: we went from 5.24 on Tuesday to 5.16 today. The model has been steadily downgrading its outlook as the geopolitical and economic picture deteriorates.
QQQ closed at $593.72, now $16.14 below the 70-day EMA of $609.86. That gap keeps widening — it was $13.84 yesterday, $4.35 on Wednesday. Below the EMA means no override.
Final Recommendation: 30% QQQ / 70% Cash
Three straight weeks of losses. The S&P is down 5% from its highs. And the model has had you 70% in cash for all of it. That's not a bug, that's the feature.
📉 The Cruelest Fade: Up 0.9% at Open, Down 0.3% at Close
Friday opened with hope. The U.S. temporarily lifted sanctions on Russian oil to expand supply, and oil pulled back slightly from yesterday's panic levels. Futures were green. The Dow opened up 301 points (+0.7%). The S&P climbed 0.9%. Traders were buying the dip.
Then reality showed up for the afternoon session.
Oil kept grinding higher — WTI settled at $98.71 (+3.1%) and Brent closed at $103.14 (+2.7%). That's Brent above $100 for the second straight day. The Russia sanctions lift was a nice gesture, but Iran's new supreme leader is still promising "not a litre of oil" through Hormuz. You can't out-diplomacy a blockade.
The final damage:
- Dow: +5.70 points (+0.01%) — essentially flat after giving back 295 points
- S&P 500: -21.30 points (-0.32%) to 6,651 — new 2026 low
- Nasdaq: -152.64 points (-0.68%) to 22,159 — tech took the worst of it
This is the third consecutive weekly loss for the S&P 500 — the first time that's happened in about a year. The index is now 5% below its recent highs.
💣 GDP Gets Cut in Half: 0.7% vs. 1.4% — The Stagflation Word Is Getting Louder
This might be the most underappreciated story of the day. Q4 GDP was revised down to 0.7% from the previous estimate of 1.4%. That's not a small revision — they literally cut the growth rate in half. The Dow Jones consensus was 1.5%.
Let me put this in context: oil just blasted through $100 on a supply shock. That's inflationary. And now we find out the economy was already growing at less than 1% BEFORE the Iran crisis even started. Inflation pressures going up + growth going down = the textbook definition of stagflation.
The downward revision came from weaker consumer spending and government expenditures than previously estimated. Translation: the American consumer was already running on fumes before gas prices started screaming higher.
This is exactly the kind of environment where the score's defensive posture makes the most sense. You don't need to be a genius to see that $100 oil + sub-1% growth is a bad cocktail for equities.
😟 Consumer Sentiment Hits 2026 Low — And That Was Before They Saw the Gas Bill
Michigan Consumer Sentiment came in at 55.5, down 1.9% from February and the lowest reading of 2026. Close to consensus (55.3), so no surprise there.
But here's the kicker: this survey was largely conducted before oil crossed $100. The next reading is going to include consumers watching gas prices spike toward $4-5 per gallon while hearing the word "war" on every news channel. I'd expect another leg down in sentiment next month.
Consumers are telling you they feel lousy about the economy. GDP is telling you the economy IS lousy. Oil is telling you things are about to get more expensive. At some point, all three of those things start feeding on each other.
💻 Adobe -8%, Big Tech Bleeds, and the Rotation Continues
In non-oil news: Adobe tanked 8% after CEO Shantanu Narayen announced he's stepping down. Leadership transitions at megacap tech companies during a broad market selloff? Not ideal timing.
Microsoft and Apple both dropped about 1.4% as the rotation out of growth stocks continued. The Nasdaq's -0.68% underperformance vs. the Dow's flat finish tells you everything about where money is flowing: out of tech, into defensive sectors and cash.
When oil is the story and consumer spending is getting revised down, nobody wants to own high-multiple growth names. The market is repricing risk in real time.
🎯 My Take: The Model Is Tracking This Selloff Like a Heat-Seeking Missile
Let's zoom out. Since the Iran crisis started on February 28, here's what's happened:
- S&P 500 has posted three straight weekly losses
- The index is down 5% from recent highs
- Oil has gone from ~$70 to $103
- GDP just got revised to 0.7%
- Consumer sentiment is at its 2026 floor
And through all of it, the score has been sitting at Neutral with 70% cash. It briefly flirted with Cautious (5.11) today, which would've added short exposure — and honestly, that intraday dip to 5.11 came right as the market was rolling over from its morning highs. The timing, once again, was eerily good.
Yesterday I highlighted how the score's 70% cash position was looking brilliant. Today it looks even better. The gap between QQQ and its 70-day EMA is now $16.14 and growing. The trend is clearly down, the score is clearly defensive, and the fundamentals are clearly deteriorating.
The biggest risk right now isn't being too cautious — it's jumping back in too early. Friday the 13th gave us a perfect example: the market dangled a 0.9% gain in front of dip-buyers, then ripped it away. That's not a market you chase.
⚠️ Bottom Line: Stagflation Isn't a Hypothetical Anymore
The data is painting a picture that Wall Street doesn't want to look at: growth at 0.7%, oil above $100, consumers at their most pessimistic of the year, and a geopolitical crisis with no off-ramp. That's not a dip to buy. That's a regime change in market conditions.
The score at 5.16 with 70% cash is exactly where you want to be. If Iran escalates further or oil pushes toward $110-120 again, don't be surprised if the model drops below 5.15 and stays there — at which point we're talking about short exposure, not just cash.
Key levels to watch:
- S&P 500 6,600: If this breaks, we're looking at a full-blown correction
- WTI $100: Psychological level — once WTI joins Brent above $100, panic selling accelerates
- Score 5.15: The line between Neutral and Cautious — the model is one bad day from going short
- QQQ $609.86 (70 EMA): Now $16 below — the longer we stay under, the harder the climb back
The model is doing exactly what it's supposed to do: keeping you mostly out of a market that keeps finding new ways to hurt you. Stay patient. Stay in cash. The bottom isn't in yet.