📊 The Score Dropped to Cautious While the Market Partied
Yesterday the Dow dumped 1,100 points and the score's Neutral stance (70% Cash) shielded the portfolio beautifully. Today, markets bounced hard — Nasdaq up 1.3%, Dow up 238 points — and you'd think the score would follow. It didn't.
The score started today at 5.18 (Neutral: 30% QQQ / 70% Cash) during the pre-market, then systematically deteriorated through the session. By 10:19 AM ET — while the Nasdaq was ripping higher — the score crossed into Cautious territory at 5.13 (40% SQQQ / 60% Cash). It bounced briefly to 5.14 at 1:21 PM before settling back at 5.13 into the close.
QQQ closed at $610.75, still $2.37 below the 70-day EMA of $613.12. Below EMA, no override — we follow the score.
Final Recommendation: 40% SQQQ / 60% Cash
The market rallied. The model got more bearish. One of them is wrong. History says the model usually figures it out before the crowd does.
🕊️ Bessent's Promise: "The Navy Will Escort the Tankers"
The rally's catalyst was clear: Treasury Secretary Scott Bessent went on CNBC's Squawk Box and essentially said the US government would personally babysit every oil tanker through the Strait of Hormuz. DFC insurance for crude carriers and cargo ships. Navy escorts "when appropriate." A "series of announcements" to keep oil flowing.
And it worked — at least for today. WTI crude barely budged, closing at $74.66 (+0.1%), its first session without a meaningful spike since the war started. Brent settled at $81.40. After four straight days of oil surging, the bleeding stopped.
Markets took the cue. If Bessent can keep Hormuz open, the worst-case energy scenario gets pulled off the table. That's the bull thesis. The bear thesis? You're relying on Navy escorts through a strait where Iran has already hit four vessels and declared it closed. One wrong move and oil is at $100.
💻 Tech Led the Charge — Because of Course It Did
When markets want to bounce, they reach for the Mag 7. Today was no different:
- AMD: +5.5%
- Micron: +5.5%
- Amazon: +3.9%
- Tesla: +3.6% — Bank of America upgraded to Buy with a $460 price target, calling it the "clear leader in autonomous driving"
- All Mag 7 names: Green across the board
Semiconductors and megacap tech doing the heavy lifting on a war-bounce day tells you something about conviction. This wasn't broad-based economic optimism. This was "the most liquid names are on sale, let me grab some." Tactical, not structural.
📋 ADP Jobs: Decent Headline, Ugly Underbelly
ADP reported +63,000 private sector jobs in February, beating the 48,000 estimate. Sounds great, right? Look closer.
- January was revised down from 22,000 to just 11,000. That's pathetic.
- Hiring was concentrated in education/health services (+58K) and construction (+19K). Strip those out and the rest of the economy barely added jobs.
- Job-changer pay premium hit a record low — the incentive to switch jobs is the weakest it's ever been since ADP started tracking it.
This is the kind of report that looks okay at 8:15 AM on the headline and worse by lunch when you read the details. Broad-based job creation this is not. Two sectors carried the entire number.
🎯 My Take: The Model Sees Through the Bounce
Here's what's interesting about today: the market rallied on two things — Bessent talking tough about oil, and tech stocks getting scooped up on discount. Neither of those addresses the actual problem.
The war isn't over. Iran declared the Strait closed. Four ships have been hit. Oil is still 11% above pre-war levels even after "stabilizing." And the score — which was Neutral at 5.18 when yesterday's crash happened — didn't get MORE bullish after today's bounce. It got less. It moved from Neutral to Cautious.
The model is reading the underlying economic data, not the headlines. And whatever it's seeing beneath the surface, it doesn't like it. The score has been on a slow bleed from 5.23 on Monday afternoon to 5.13 now — a steady march toward more defensive positioning while markets chop around on geopolitical headlines.
Is the model early? Maybe. Is it wrong? Yesterday's 1,100-point crash says otherwise. One good bounce doesn't erase a war. QQQ is still below the 70 EMA. The trend is still down. And the score just told you to get even more defensive.
⚠️ Bottom Line: Don't Confuse a Bounce With a Bottom
The score is at 5.13 — Cautious (40% SQQQ / 60% Cash). QQQ is below the 70 EMA. That's two bearish signals stacked on top of each other.
Key levels to watch:
- QQQ $613.12 (70 EMA) — bulls need to reclaim this to change the trend narrative
- Oil $75-80 WTI — if Bessent's pledges actually work, oil settling here keeps the panic at bay
- Friday's jobs report — Nonfarm Payrolls will be the next real test. ADP's Jan revision to 11K is a yellow flag.
Today felt good. Yesterday felt terrible. The score ignored both days and just kept getting more cautious. Sometimes the best signal is the one that doesn't react to noise.