The Pro-Eyes index has been mostly cautionary as froth was building in late 2024 and early 2025. The valuation component of the index is back in more neutral readings, but caution remains that forward based earnings are wrong if we are going to see a prolonged tariff war develop.

Business cycle risks remain elevated, but the trading indicators are extremely oversold. For the traders out there, put your favourite stocks on the front burners and start to buy some weakness. It’s far too soon to predict a longer-term bottom since the decline was so rapid. We will not see a fiscal policy response bazooka from the Federal Open Market Committee (FOMC) or the U.S. Congress for that matter any time soon.

The only thing that will reverse course is world trade peace. That will require U.S. President Donald Trump to blink. His ego may not allow it. Another 10 per cent off the S&P 500 might move him a bit. Congress and his internal team are beginning to fracture.

As we saw in most of 2022 during the last notable opportunity period, it can last for an extended period. This part is impossible to know unless you have insight into the highly unpredictable nature of Trump’s negotiating skills.

During periods of high uncertainty, this is a trader’s environment and most investors tend to get paralyzed when volatility spikes. It’s an opportunity, but it’s not likely going to be easy unless we see a policy shift soon.

The overall tactical indicator hit extreme levels. If we do get a policy shift, the markets can rip higher, but we need stability and new policy agreements and that may take a while to fully play out. I’d expect something from Trump or Congress in the next few days to add some stability.

S&P 500 futures hit a major support area (50 per cent retracement of the 2022-2025 rally, 2021 highs) Sunday night and some buying did emerge.

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