Black Monday didn’t come: Market Analysis

S&P 500 "SPY" Weekly Chart Reaches Support Test Point

If you’ve been watching the market you’re probably tearing your hair out. So, the obvious advice is maybe not to watch the market and let things play out. 

I attended the Market Technician’s Association annual conference this weekend in San Francisco. Attended by top investment analysts and institutional money managers. The consensus was, as expected, that the tariffs initiated by the administration are bad and will wipe out trillions of dollars of new economic growth in the US. So, it begs the question, where will the growth be if not in the US? And yes, we can invest there, wherever it is.

Portfolios are down across the board after what was widely considered a very frothy, profitable last couple of years. From April 2023 to today, the S&P 500 returned 23%. From the watermark high on Feb. 18, 2025 it painfully retreated 17%. After a frothy couple of years, a pull-back was expected, but albeit not at the chaotic rate that we’ve seen over the last few trading days. 

Where do we go from here?

The volatility brought on by the administration and hyper-stressful headline news will likely continue. What the market does in the next few weeks, however, will be the only important factor to make an educated assessment of how to allocate investments going forward. I will watch the data while ignoring the “noise”.

The S&P 500 has been in a bull market since 2008. Today the market has reached a major support test point (see chart), which suggests a bounce higher and if so, a continuation of the bull market. A break lower will suggest a contraction, something we haven’t seen in the last 17 years but nevertheless, we should be prepared for it.

A wait and see approach is recommended.

Taking significant action during periods of volatility generally results in more losses. Allowing the market to find equilibrium means showing patience and resilience during market stresses.

Investment opportunities emerge during these times.

While most investors are freaking out, strategic investors see opportunities in times of disruption. 

Taking taxable losses during periods of volatility will improve your tax situation.

Keeping a high cash reserve will prevent the need to sell investments.

More to come.

As tariffs sculpt a new world order, we can expect the emergence of new investment opportunities. Deglobalization will likely be painful for some investors, who are accustomed to high portfolio returns from technology stocks; they are more likely to feel further pain there. Higher inflation, already an issue, will be exacerbated by tariffs which may drive up prices in materials, metals, (ie, gold and silver), food, US stocks with local manufacturers, and international bonds due to a declining US dollar. 

At Eureka Wealth Management, I provide risk management solutions during times of volatility. If you or someone you know would like to schedule a portfolio review, please book a meeting at eurekawealthmanagement.com/book-online. I also do financial planning and insurance strategies.

Sources:

NYT 4/6/25: “Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal” link