📉 Since This Morning: The Score Fell Off a Cliff While the Market Kept Climbing
When we published this morning's post at 11:50 AM, the score was at 5.10 — Cautious, the lowest since March 25. I warned that 5.04 was only 0.06 away and "one more bad headline could push us there."
Well, it didn't take a headline. It took a rally.
QQQ opened flat around $604 and just... kept grinding higher. By 3:00 PM, it was trading at $609.38. By the close, $610.25. The S&P gained 0.62%. The Nasdaq added 0.83%. The Dow turned positive for 2026. Seven straight days of gains — the longest streak since October.
And the score? It did the exact opposite. While QQQ rallied $6 from the morning, the score dropped from 5.10 to 5.02. That's not a contradiction. That's the score doing its job — as QQQ crossed above price level after price level, the model subtracted points at each one. The market is running. The score is taking profits. Classic divergence.
📊 The 5.05 Gateway Fired: New Ref at 5.02
At 2:50 PM ET, the score hit 5.02 with QQQ at $609.38. That crossed below 5.05 — the short leverage gateway into High Risk (50% SQQQ / 50% Cash). Gateways fire on contact when adding inverse leverage, regardless of distance from the ref. The old ref of 5.14 from Tuesday's Cautious gateway is gone.
New ref: 5.02 (Apr 9, 2:50 PM ET)
Current score: 5.03 (Apr 9, 3:54 PM ET)
Raw allocation: High Risk — 50% SQQQ / 50% Cash
Next triggers:
- Up: 5.09 — that's ref (5.02) + 0.07, crossing into Cautious. Short leverage exit, so the 0.07 rule applies (no gateway shortcut going up).
- Down: 4.95 — gateway into Extreme Risk-Off (100% SQQQ). Only 0.08 away. That would be the most defensive signal the model has.
To be clear about what just happened: the score went from Cautious to High Risk not because new bad data hit, but because QQQ rallied $6 above price levels where the model sees the risk/reward as stretched. No economic reports today drove this — pure price action. The model is saying: at $610, with a still-fragile ceasefire and CPI looming, QQQ is expensive relative to the current macro backdrop.
🛡️ The EMA Override Just Got a Lot More Comfortable
This morning I said watch $601.26 — that's where the EMA override dies. The cushion was $3.22 and I called it thin.
Here's the close: QQQ at $610.25. EMA 70 at $601.42. That's an $8.83 cushion — nearly triple what it was this morning.
The raw signal says 50% SQQQ / 50% Cash. The EMA override says 100% QQQ. And with $8.83 of breathing room, the override is no longer hanging by a thread — it's sitting comfortably above the line. QQQ would need to drop 1.4% to even test the EMA. That's a meaningful decline, not an intraday wobble.
Final recommendation: 100% QQQ (EMA override active)
🇮🇱 The Afternoon Catalyst: Netanyahu Opens Lebanon Talks
The morning was all ceasefire anxiety — Iran accusing the US of violations, only 5 ships through the Strait of Hormuz vs hundreds per day normally, oil pushing back above $100. Then mid-afternoon, Israeli PM Netanyahu announced that Israel has agreed to open direct negotiations with Lebanon.
Oil came off its morning highs. The market took it as a de-escalation signal — if Israel is talking instead of bombing, one of Iran's three ceasefire complaints is being addressed. That's what powered the late-day push: QQQ went from $609 at 3 PM to $610.25 at the close.
Is it enough? Probably not. The Strait of Hormuz is still effectively closed. Iran's other complaints — the drone incursion and uranium enrichment rights — aren't going anywhere. But it gave the market enough cover to extend the winning streak to seven days. And seven-day streaks have momentum of their own.
💡 Bottom Line: The Score Is Screaming, but the EMA Has Earplugs
Here's the divergence as it stands at the close: the score is at its most defensive level since the Iran crisis began, while the market just posted its seventh consecutive gain and the EMA cushion is the widest it's been all week.
Something has to give. And tomorrow at 8:30 AM ET, it probably will. The March CPI report is expected to show 3.7% year-over-year inflation — up from 2.4% in February. That's an 85-basis-point jump driven by the oil shock. If it comes in hot, rate cuts are dead and QQQ at $610 looks very expensive. If it comes in cool (unlikely), the rally has real legs.
The score already thinks QQQ is expensive. The EMA override disagrees. Tomorrow morning, the data picks the winner.
100% QQQ tonight. But set your alarm for 8:30 AM. This one matters.