Did someone say, BEAR MARKET?!Oh yeah! I think it's time to start talking about the possibility and likelihood of the reality we are seeing. I enjoy doing more educational and analytical posts, and my goal this year was to do more of them again—so here we go, round two of 2025!
Let’s Talk About the Market
It's selling, in case you hadn’t noticed. Some may say “correction,” but I say tomato, tom-ah-to. The reality is that a bear market is, at its core, a correction. Historically, bear markets haven’t just started for no reason. It’s not like the S&P 500 wakes up one day and has this conversation with the NASDAQ:
S&P: Yo, Nazzy.
NAZ: What?
S&P: Let’s do something new.
NAZ: What?
S&P: Let’s tank and shake the whole world. You up for it?
NAZ: I don’t... I don’t know, I don’t think...
S&P: Nah, nah, trust me. It’ll be funny. Let’s ruin some 401(k)s and give the economy a real shock. It’ll be hilarious! You in?
NAZ: I... I don’t... fine, I guess. 🙄
Yeah, no. The reality is that bear markets result from multiple factors, such as:
Bubbles
Over-exuberance
Changing economic conditions
Changing geopolitical factors
Many other interconnected influences
Every bear market in the long history of the S&P has been the result of several of these factors combined. No bear market ever materialized out of thin air. While some crashes have occurred for questionable reasons—such as Black Monday in the 1980s—true bear markets typically result from a prolonged accumulation of unsustainable growth.
This could be due to:
Outpricing the average investor (which the S&P currently does).
Being fueled by speculative innovation (we have AI hype today, just as the ‘90s had dot-com hype).
Becoming disproportionately large compared to the actual monetary supply in which it operates (as of 2025, the S&P 500 is valued higher than the U.S. money supply—more on that later).
So, as you can see, we have some basis for a bear market thesis here.
Blame Trump?
I see a lot of people blaming Trump, so let me preface this—I don’t support him, but I’m not about to make this a politically fueled post because that would distract from the real issue at hand. The reality is that he’s not the root cause of the market’s decline.
These structural factors existed pre-Trump and will exist post-Trump once this correction is complete. However, while he may not be the root cause, he is certainly throwing fuel on the fire.
His obsession with tariffs, economic instability, and personal financial gains (cough crypto cough) has arguably added to the growing lack of confidence in the market. Investors and hedge funds aren’t dumb—when Warren Buffett and other major firms pulled out before the decline started, that should have been the first warning sign.
The market was already reaching astronomically high valuations. However, recovery may take longer when the leader of the economy is actively contributing to instability rather than fostering confidence.
The Crypto Situation—A Warning Sign
What Trump did with crypto raises serious concerns. If crypto can be manipulated for personal gain, who’s to say the NYSE itself won’t be next?
Elon Musk and others have already gotten away with market manipulation, setting a dangerous precedent of complacency from the SEC. In my opinion, investor confidence should have eroded long ago.
To put numbers behind this sentiment, the American Association of Individual Investors conducts a weekly survey on investor sentiment. As of March 13, 2025, results show:
Only 19% of investors are bullish
60% are bearish
This marks the 4th consecutive week of majority bearish sentiment
Complex Market Dynamics
There’s a lot happening right now that complicates the situation. Months ago, I posted a video about the US Money Supply vs. the S&P 500, available here:
In this video, I discuss how overextended the market is relative to the US money supply. The only way to sustain current valuations would be to drastically increase the money supply.
But here’s the problem:
📌 Increasing the money supply = higher inflation
With the US already narrowly avoiding recessions since 2022, increasing the money supply further would exacerbate inflation, leading to even greater economic instability.
Check out this chart I plotted, showing US Money Supply (green) vs. Inflation (red):
As you can see, whenever the money supply increases, inflation follows.
Tariffs & The Economy
Many people assume that tariffs increase the money supply—but that’s not how it works. The USA is not self-sufficient (no country is), and it still relies on imports.
Who actually pays the tariff? Not the foreign country—the domestic consumers do.
For example, when an American buys a product made in China, they pay the tariff cost, which is then sent back to China. It’s a net-zero game that hurts both economies without providing any real financial advantage.
Let’s Get Mathy 🤓
Now, let’s bring in the math.
In my last money supply video, I used visual scaling and qualitative comparison. But for a rigorous analysis, we need to:
Assess cointegration
Ensure stationarity
Develop a cointegrated pair regression
If the US Money Supply and the S&P 500 are cointegrated and stationary, we can use the money supply to predict the S&P’s valuation.
And guess what? They are.
Using the Augmented Dickey-Fuller test (for stationarity) and the Johansen Cointegration Test, we get positive results:
This confirms a strong relationship between US Money Supply & the S&P 500 across multiple cointegrated vectors.
The Cointegration Equation
Running a cointegration regression in R, we get this equation:
📌 y = 2.046e-10x - 1.492e+02
Where X = current money supply and Y = expected S&P 500 valuation.
Plugging in today’s money supply gives us an expected S&P value of 4,262.571.
Accounting for error range (σ = 294.8):
Upper Bound: 4,557.371
Lower Bound: 3,967.771
I’ve incorporated this equation into PineScript to show you here:
Will the S&P Correct to the Money Supply?
Not necessarily. Money supply is dynamic, and as it increases, so will the expected S&P valuation.
This relationship will persist until equilibrium is restored. We can see this in historical data:
The Verdict
This is a much-needed correction—or bear market, call it what you want.
The S&P’s growth rate was unsustainable, especially in relation to:
The US Money Supply
Speculative AI-driven hype
Economic & geopolitical instability
Whether the S&P falls all the way to equilibrium or they meet somewhere in the middle remains to be seen. But one way or another—equilibrium will be restored.
This post is already long enough, so I’ll leave it at that!
Thanks for reading, and as always—safe trades! 🚀
SPXM trade ideas
SPX Volume profile support and gap through. Must know toolI have taken a volume profile across the rally to project Low value nodes and high value nodes to find support levels during the decline. I simply cannot emphasis enough how valuable this tool is if learn to use correctly. I use this conjunction with geometry (hidden here)
Most us know prices will come to fill the price gaps in the future, but LVN and HVN can provide information that price and volume cannot provide on their own. Eg a large bar could have a heavy volume, but you wouldn't know at what price the volume was, whether it was at the opening or closing, unless you look at the VP. Inspite of a huge volume there could be a price gap hidden in the bar
The S&P 500 index is likely to change its upward trajectory.The S&P 500 index approached the "cup and handle" target at 6152 points, but recently it has formed a "head and shoulders" reversal pattern at the neckline. The index has retraced to 5783, filling a previous gap. If it trades below this gap, it may head towards 5583 points to achieve the head and shoulders pattern target.
SPX - Continuing the downward trendGiven the flow of bearish orders on the daily and lower timeframes, the SPX is still in a bearish trend. Of course, if the weekly candle closes below 5771.3, the structure on this timeframe will also become bearish.
So in this situation, opening short positions is better than long positions. Note that any upward movement can only be a small daily correction.
We will probably see another BoS on the 15-minute timeframe today and the price could reach another support level.
Everything is clear on the chart
Watch, enjoy, be profitable
SPX: Dead cat bounce or new highsAt the moment I am tracking a massive ending diagonal pattern for SPX that started Back in March 2020 after covid crash. The recent correction looks very oversold, and a bounce is due if not already started. I am looking at weekly RSI reading to get some resistance at 50 level if this is a dead cat bounce. Looking left, every time RSI fell around 40 level, it got resistance at 50 level and fell back down again, and price created a lower low. The price needs to get above 6000 to get confidence back to make another high. The resistance should come in at around 5900-5950 area. If it rejects, then probability of primary wave 4 will increase greatly and price could fall around 4800 in the second half of the year.
If price can break through resistance and move up higher, then wave 3 will continue one more leg and the count will get updated to WXY with the last leg to complete the wave before the bigger correction. At the moment, staying cautiously long in spy to at least catch the b wave.
S&P500 Index Goes 'DRILL BABY DRILL' Mode due to Tariffs BazookaThe Trump administration's aggressive use of tariffs — we termed at @PandorraResearch Team a "Tariff' Bazooka" approach due to their broad, unilateral application — has exerted significant downward pressure on the S&P 500 index through multiple channels. These include direct impacts on corporate profitability, heightened trade war risks, increased economic uncertainty, and deteriorating market sentiment.
Direct Impact on Corporate Earnings
Tariffs raise costs for U.S. firms reliant on imported inputs, forcing them to either absorb reduced profit margins or pass costs to consumers. For example, intermediate goods like steel and aluminum—key inputs for manufacturing—face steep tariffs, squeezing industries from automakers to construction. Goldman Sachs estimates every 5-percentage-point increase in U.S. tariffs reduces S&P 500 earnings per share (EPS) by 1–2%. The 2025 tariffs targeting Canada, Mexico, and China could lower EPS forecasts by 2–3%, directly eroding equity valuations6. Additionally, retaliatory tariffs from trading partners (e.g., EU levies on bourbon and motorcycles) compound losses by shrinking export markets.
Trade Escalation and Retaliation
The EU’s threat to deploy its Anti-Coercion Instrument—a retaliatory tool designed to counter trade discrimination—could trigger a cycle of tit-for-tat measures. For instance, Canada and Mexico supply over 60% of U.S. steel and aluminum imports, and tariffs on these goods disrupt North American supply chains. Retaliation risks are particularly acute for S&P 500 companies with global exposure: 28% of S&P 500 revenues come from international markets, and prolonged trade wars could depress foreign sales.
Economic Uncertainty and Market Volatility
The U.S. Economic Policy Uncertainty Index (FED website link added for learning purposes) surged to 740 points early in March 2025, nearing levels last seen during the 2020 pandemic. Historically, such spikes correlate with a 3% contraction in the S&P 500’s forward price-to-earnings ratio as investors demand higher risk premiums. Trump’s inconsistent tariff implementation—delaying Mexican tariffs after negotiations but accelerating others—has exacerbated instability. Markets reacted sharply: the S&P 500 fell 3.1% in one week following tariff announcements, erasing all post-election gains.
Recession Fears and Sector-Specific Pressures
Tariffs have amplified concerns about a U.S. recession. By raising consumer prices and disrupting supply chains, they risk slowing economic growth—a fear reflected in the S&P 500’s 5% decline in fair value estimates under current tariff policies. Industries like technology (dependent on Chinese components) and agriculture (targeted by retaliatory tariffs) face acute pressure. For example, China’s tariffs on soybeans and pork disproportionately hurt rural economies, indirectly dragging down broader market sentiment.
Long-Term Structural Risks
Studies show tariffs fail to achieve their stated goals. MIT research found Trump’s 2018 steel tariffs did not revive U.S. steel employment but caused job losses in downstream sectors8. Similarly, the 2025 tariffs risk accelerating economic decoupling, as firms diversify supply chains away from the U.S. to avoid tariff risks. This structural shift could permanently reduce the competitiveness of S&P 500 multinationals.
Conclusion
In summary, Trump’s tariff strategy has destabilized equity markets by undermining corporate profits, provoking retaliation, and fueling macroeconomic uncertainty.
Overall we still at @PandorraResearch Team are Bearishly calling on further S&P 500 Index opportunities with further possible cascading consequences.
The S&P 500’s recent slump reflects investor recognition that tariffs act as a tax on growth—one with cascading consequences for both domestic industries and global trade dynamics.
--
Best 'Drill Baby, Drill' wishes,
@PandorraResearch Team 😎
S&P500: Bottom of 2 year Channel. Target 6900.S&P500 is oversold on its 1D technical outlook (RSI = 27.644, MACD = -113.480, ADX = 60.232) as the price didn't only cross under the 1D MA200 but is also almost at the bottom of the 2 year Channel Up. In the meantime, the price reached the 0.618 Fibonacci retracement level while the 1D MACD touched its LH trendline. The last time all those conditions were met at the same time was on the October 30th 2023 Low. What followed was a massive rally to the -0.618 Fib extension before the next 1D MA50 pullback. This is a unique opportunity to buy and aim for the -0.618 Fib (TP = 6,900).
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$SPX - Trading Levels for March 13 2025
Alright, y’all. We are dangling, unsupported underneath the 200DMA and that Bear Gap. I am trading cautiously today because inflation data days I tend to make a lot of mistakes.
35EMA - this level is a BEAST. We were unable to get above it yesterday. Trace it back 3 weeks and you’ll see it’s been there every time to push us back lower.
I will be looking to the outer spreads and even then I might push it out a little.
If and when I take a position I will update it here.
GL, y’all.
Century-Old SPX Channel Signals Crucial Market Inflection1. Long-term Channel:
The SPX has been following a clearly defined logarithmic trend channel, with highs and lows confined within this channel for nearly a century.
2. Current Price Action (2025):
o The index recently broke through the upper bound of the historical channel in 2024.
o It's retraced back through the channel in March 2025.
3. Historical Reference Points:
o Significant points noted are the 1929 market crash, the 1932 market low, and subsequent recoveries and corrections.
o The marked reference points (1929, 1932, 1942, 2000, 2009, 2020, 2022, and 2024) show pivotal moments where the price interacted meaningfully with this long-term channel.
Key Observations and Considerations:
• Logarithmic Scale:
o This emphasizes percentage changes rather than absolute values, clearly showing the growth pattern and highlighting significant deviations from average trend growth.
• Long-term Perspective:
o For investors, this signals caution in the near-term, suggesting potential further downside.
o From a longer-term perspective, significant pullbacks within this historical channel have historically provided strong opportunities for long-term investment.
S&P 500 at a crossroads: breakout or fake move?The S&P 500 is stuck in a two day old descending triangle pattern making it a tricky setup after an aggressive sell off. A clean break below could lead to a drop towards 5549 with a further 1.6 percent decline. However there’s also the chance of a false breakdown followed by a rebound which could turn this into a fake move.
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S&P INTRADAY bearish & oversold capped by resistance at 5714The US Producer Price Index (PPI) increased by 3.2% year-on-year in February, down from 3.7% in January and slightly below the expected 3.3%.
The core PPI, which excludes food and energy prices, rose by 3.4% annually, also lower than the 3.8% recorded in January. On a monthly basis, the PPI remained unchanged, while the core PPI saw a slight 0.1% decline.
Key Support and Resistance Levels
Resistance Level 1: 5714
Resistance Level 2: 5770
Resistance Level 3: 5805
Support Level 1: 5523
Support Level 2: 5480
Support Level 3: 5300
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
A Pause in the Slaughter HouseAfter the brutal decline we witnessed for the last few days, it looks like the SP500 has found a floor. The markets never move in a straight line. The VIX reached a level above 29, which signals high volatility and lower prices. The small pauses it took were just small bounces used by the market to keep selling.
Yesterday we say a change in the trend of the VIX. In the Madrid Symbol Display indicator we see there was a meaningful change in the trend of the fear Index, It broke its trend at 27 to settle at 24. We're far from being out of the woods, specially considering that Trump is not backing off from his tariffs, and he disregarded the stock market as his performance gauge like he used to do during his first term, as well as the unemployment levels. His arguments are "it's going to cause a little disturbance", and "they're globalist companies that ripped off the US". Well those were not arguments he used during Trump v.1.
Tesla plummeted, and we saw it coming when the insiders dumped stock. Elon hasn't dumped his stock, and he's the major shareholder of Tesla share, but we have seen the decline, and since this is one of the major index contributors, it has dragged down the market. We have seen declines also in crypto, chip manufacturers, etc. So it's not only Tesla, the debate of whether the boycott and/or the market environment have contributed to its decline is another story that has to be addressed separately.
Bottom line, the market seems to get get ready for a "Dead Cat Bounce", and probably taking the index to the "Back to Normal" sentiment. Be aware that the momentum indicators are pointing down, and so far, this is not going to be a declared uptrend. The geopolitical environment and the tariffs are not gone, so the initial triggers are still active, and there's no reason to think this is going to change in the short term.
We can say that a relief rally is in the making, and as long as the VIX is kept in check under the 24ish level we can take it as a truce to rebalance portfolios and hedge positions.
SPX Target 5800.
S&P 500 Index, Gold, and BitcoinToday, I’m analyzing the weekly charts of the S&P 500 Index, Gold, and Bitcoin. Notice anything interesting? 🤔
Since late 2022, these assets have been moving in sync, showing an unusually strong correlation. At times, it almost feels like they’re behaving as a single market. But spotting these connections provides valuable insights we can use to our advantage.
One chart that stands out is the S&P 500 Index, particularly its rebound from the dual Fibonacci support zone around $5520. This is a critical level, and as long as it holds, both Bitcoin and Gold are likely to maintain their upward momentum.
For now, the overall market sentiment remains bullish, and this trend could continue throughout the year. 🚀
Bearish Darvas Box? Here’s How I’m Trading It...Bearish Darvas Box? Here’s How I’m Trading It | SPX Market Analysis 13 Mar 2025
The market is stuck on repeat, playing the same song over and over. Drop, pause, drop, pause—sideways, down, sideways, down. This looks very much like a bearish Darvas box pattern.
And guess what? We nailed it (yesterday).
📌 SPX continues to stair-step lower, just as we anticipated.
📌 5650 remains a rock-solid resistance level—confirmed by Gamma Exposure.
📌 On Monday, we expected a sideways stall—and we got exactly that.
With this predictable rhythm, we locked in another live zero-day trade during my Fast Forward Mentorship call, hitting max profit by the end of the day.
Until a breakout forces a change, I’ll keep stacking bearish trades, watching pulse bars, and waiting for the next clean setup.
Viva la profits!
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Deeper Dive Analysis:
At this point, the market feels like it’s reading from a script—stair-step down, stall, stair-step down again.
And frankly? I’m not complaining.
📌 The Setup – Another Day, Another Bearish Move
From Monday’s analysis, we expected this exact movement—SPX meandering sideways after a drop, before setting up the next move.
5650 remains resistance, confirmed by Gamma Exposure.
5700 is the key level before I even think about bullish setups.
If we break lower, 5255 is still the daily breakdown target.
📌 The Trade – Zero-Day Profits, Executed to Perfection
With the market following our expected pattern, I took full advantage:
✅ Live zero-day trade executed during my Fast Forward Mentorship call. (see main blog for walkthrough)
✅ Plan was simple—sell premium at the range high, let the market do the work.
✅ Expired at max profit by the end of the day.
This is what happens when you trade with structure—no guessing, no chasing, just following the game plan and letting the market pay you.
📌 What’s Next? Playing the Game Until It Changes
Until SPX decides to break out, I’ll continue to:
Look for bearish entries, pulse bars, and breakouts.
Delay bullish plays until we clear 5700.
Stay patient and let the profits stack up.
Because when you have a system that works, you don’t need to force the market—just follow its lead.
Viva la profits!
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Fun Fact
📢 Did you know? The Darvas Box Trading Strategy was created in the 1950s by a professional ballroom dancer who turned $25,000 into $2.25 million in 18 months—all while travelling the world.
💡 The Lesson? Sometimes, the best traders aren’t even traders at first—but they know how to follow a system that works.