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Delegations from the countries have held indirect discussions on Tehran’s nuclear program in Rome

A US delegation attempted to present realistic demands to Iran during Omani-mediated negotiations in Rome on Saturday, an informed source has told RT.

The delegations, led by US Middle East envoy Steve Witkoff and Iranian Foreign Minister Abbas Araghchi, sat in separate rooms as Omani mediators relayed messages between them.

The talks came two weeks after US President Donald Trump threatened Iran with “bombing” unless an agreement on its nuclear program was reached.

An informed source familiar with the talks told RT that “the American delegation tried to set its demands realistically in the second round of negotiations.”

“We made very good progress in our direct and indirect discussions,” a US official told CBS News.

Araghchi wrote on X that the “relatively positive atmosphere in Rome has enabled progress on principles and objectives of a possible deal.” He added that many in Tehran believe the 2015 Joint Comprehensive Plan of Action (JCPOA), the original nuclear deal, is “no longer good enough for us.”

Trump abandoned the JCPOA during his first term in office, accusing the Islamic Republic of secretly violating the deal. His administration reimposed sanctions on Iran and, in February, after returning to office, he formally renewed his “maximum pressure” campaign. Tehran has denied any wrongdoing but has since rolled back its commitments under the 2015 plan, increasing its enrichment of uranium.

“Iran’s nuclear program is completely peaceful, and Iran is ready to dispel any doubts in this regard,” Esmaeil Baghaei, the spokesman for Tehran’s foreign ministry, said on Saturday.

Technical experts are scheduled to meet again ahead of the next round of negotiations between Witkoff and Araghchi in Oman on April 26, according to the Iranian foreign minister.

That is correct.

70 men stood against the advancing British regular army, 700 troops on their way to destroy the patriots’ supply depot at Concord. The rebels had been warned in advance of the route by Paul Revere and others. Even with the valuable intel, they knew they would be greatly outnumbered. As the majority of rebel forces fell back to defend Concord, these 70 stood. They stood out of principle.

It wasn’t just the outrageous amount of tax on tea (about $20/lb in today’s dollars)… it was the moral objection to any taxation at all, without representation. The native born colonists had no standing in parliament.

No one cared about them, nor their rights. The entire Empire sneered at them.

Sound familiar?

Happy Easter! My hopeful prayer is that you experience, in this Easter Season, true joy in a personal encounter with the Risen Lord. The Church’s firehose of imagery and traditions and sacred liturgy has been blasting fully at our little drinking cups. Holy Week and the Sacred Triduum can overwhelm as we reach the apex of the Easter Vigil and Sunday’s light. You know by now that I like to…

Source

The White House indicated earlier that it would wash its hands of the Ukraine conflict if either side is obstinate

US President Donald Trump reportedly expects to “make a determination for a full and comprehensive ceasefire” between Ukraine and Russia as early as next week. Both are to be presented with the final offer, the New York Post has claimed, citing an anonymous senior administration official.

Trump has stated on multiple occasions that he wants to put an end to the Ukraine conflict as soon as possible. Since he assumed office in January, Washington and Moscow have been engaged in active diplomacy, holding several rounds of high-level talks.

The newspaper quoted a source on Friday as saying that “this coming week in London, we want to make a determination for a full and comprehensive cease-fire.” The unnamed US official added that the “intent then is to have [discussions] with the Russians” and determine where Moscow and Kiev stand on this “final offer.”

According to the publication, Ukrainian Defense Minister Rustem Umerov told US Secretary of State Marco Rubio and President Trump’s envoy Steve Witkoff during their meeting in Paris on Thursday that Kiev is “90%” on board with Washington’s peace framework, which has yet to be made public.

Ukraine’s remaining concerns mostly revolve around territories which Kiev claims as its own, but are in fact under Moscow’s control at present, the Post reported.

Russia has demanded that Ukraine officially recognize the “reality on the ground,” while Vladimir Zelensky has repeatedly ruled out such a scenario.

The media outlet further alleged that the US could offer Russia a “carrot”: the relaxation of sanctions and the potential unfreezing of Moscow’s seized assets, which are currently held by Western institutions.

Speaking to reporters on Friday, Trump echoed a remark made by Rubio earlier in the day, stating that “if for some reason one of the two parties makes it very difficult… we’re going to just take a pass.”

Russian authorities have expressed skepticism about the feasibility of a ceasefire with Ukraine and accused Kiev’s backers in Europe of undermining US efforts.

Speaking to journalists on Thursday, Moscow’s UN representative, Vassily Nebenzia, stated that due to the West’s record of using peace deals to help build up the Ukrainian military, expectations of a full ceasefire are “simply unrealistic at this stage.”

A Holy Saturday meditation from Bossuet, that ought to kick-start you:

Like every finite thing, man is small. The time will come when this man who seemed so great to us will cease to be. The days of my life are all that stand between me and nothingness, and this is but a small difference. I enter into life under a law that commands my departure from it. I come to make my mark and to show myself as others do. Afterward, I will disappear. I have seen others pass before me; others shall succeed me, and these will present the same spectacle to their successors. All of us will at last be mixed together in nothingness.

My life, all told, has been only a handful of years; and there were so many before me and will be so many after. How small a place do I occupy in the great abyss of time! I am nothing. This short interval is not capable of distinguishing me from the nothingness into which I must return. I have come only to take my number, and to this point no use has been made of me. The drama would have been no worse acted had I remained offstage. My part in this world is very small, and so insignificant that it seems to me only a dream that I am here, and all that I see an empty image: “the form of this world is passing away” (1 Cor. 7:31).

The whole of my career has been only a handful of years; and in reaching this age how many perils have I escaped? How many illnesses? What has kept the course of my days from having come to an end at any moment? Death prepares many ambushes. In the end, we will fall into its hands. I see a tree battered by the wind; it loses leaves every minute; some resist more, others less; but those few that escape the storm will at last be conquered by winter, which always comes to wither them and make them fall. It is the same in life. The large number of men who run the same course ensures that some of them will reach the end of it; but after havingavoided the various attacks of death, and arriving at the end after so many perils, they fall at the race’s end. Their life extinguishes itself like a candle that consumes its own matter.

My life has been only a handful of years, and of these, in how many of them have I really lived? Sleep resembles death more than life; childhood is the life of a beast. How many days would I like to erase from the days of my youth? And when I am older, how many more shall I add to that total? Let us see what remains. What shall I then count, if all of these are not to be reckoned? The time during which I felt a certain contentment, or in which I acquired some honor? But how much of this sort of time is scattered throughout my life? If I take away sleep, illnesses, and times of anxiety from my life, and I now take up all of the things in which I have had some contentment or honor, how much will that be? As to this contentment: did I enjoy it all at once? Have I not had it in parcels? Have I had it without anxiety? And, if there has been anxiety, should I count it as time that I reckon or time that I do not? Has not anxiety always divided every two moments of contentment? Is it not always thrown across them to prevent them from meeting one another? What then is left to me? Of lawful pleasures, a useless memory; of illicit ones, regret, and a debt to be paid in Hell, or by penance.

How right we are to say that our time passes! Truly it passes, and we pass with it. My whole being rests upon a single moment: it is all that separates me from nothingness. When that moment has passed, I snatch another one. They pass one after the other, and one after the other I join them together, trying to reassure myself, and I do not perceive that they carry me with them, and that I will soon be out of time. This is my life, and what is so frightening is that what to my sight seems fleeting is to God an eternal present. These things have to do with me.

What belongs to me belongs to time, because I myself depend upon time. Yet they belong to God before they belong to me, and they depend upon God before they depend upon time. Time cannot wrest them from his empire, for he is above time. To him, they remain, and they enter among his treasures. What I have lost I will find again. What I do in time passes through time to eternity, for time is comprehended by and is under the rule of eternity and leads to eternity. I enjoy the moments of this life only as they pass; when they pass, I must respond to them as if they had remained. It is not enough to say, “They have gone, I will think no more of them.” They are gone to me, yes, but to God, no, and he will ask me for a reckoning of them.

If this life is a small thing because it is passing, what are we to think of those pleasures that do not last for a whole lifetime and which pass by in a moment? Are they worth their price? O my God, I resolve with all my heart, in your presence, every day, to think about death, at least when I lie down and when I rise. And with this thought: “I have little time, I have a long road to travel, perhaps I have less further to go than I think.” I will praise God for having brought me to think about repentance, and I will put order into my affairs, into my confession, into my meditation, thinking not about what passes, but with great care, great courage, and great diligence about what remains.

From the descent of Christ to hell we may learn, for our instruction, four things:

1. Firm hope in God. No matter what the trouble in which a man finds himself, he should always put trust in God’s help and rely on it. There is no trouble greater than to find oneself in hell. If then Christ freed those who were in hell, any man who is a friend of God cannot but have great confidence that he too shall be freed from what-ever anxiety holds him. Wisdom forsook not the just when he was sold, but delivered him from sinners; she went down with him into the pit and in bands she left him not (Wis. x. 13-14). And since to His servants God gives a special assistance, he who serves God should have still greater confidence. He that fear eth the Lord shall tremble at nothing and shall not be afraid: for he is his hope(Ecclus. xxxiv. 16). 

2. We ought to conceive fear and to rid our selves of presumption. For although Christ suffered for sinners, and went down into hell to set them free, he did not set all sinners free, but only those who were free of mortal sin. Those who had died in mortal sin He left there. Wherefore for those who have gone down to hell in mortal sin there remains no hope of pardon. They shall be in hell as the holy Fathers are in heaven, that is for ever. 

3. We ought to be full of care. Christ went down into hell for our salvation, and we should be careful frequently to go down there too, turning over in our minds hell’s pain and penalties, as did the holy king Ezechias as we read in the prophecy of Isaias, I said : In the midst of my days I shall go to the gates of hell (Isaias xxxviii. 10). 

Those who in their meditation often go down to hell during life, will not easily go down there at death. Such meditations are a powerful arm against sin, and a useful aid to bring a man back from sin. Daily we see men kept from evildoing by the fear of the law’s punishments. How much greater care should they not take on account of the punishment of hell, greater in its duration, in its bitterness and in its variety. Remember thy last end and thou shalt never sin (Ecclus. vii. 40). 

4. The fact is for us an example of love. Christ went down into hell to set free those that were his own. We, too, therefore, should go down there to help our own. For those who are in purgatory are themselves unable to do anything, and therefore we ought to help them. Truly he would be a harsh man indeed who failed to come to the aid of a kinsman who lay in prison, here on earth. How much more harsh, then, the man who will not aid the friend who is in purgatory, for there is no comparison between the pains there and the pains of this world. Have pity on me, have pity on me, at least you my friends, because the hand of the Lord hath touched me (Job xix. 21). 

We help the souls in purgatory chiefly by these three means, by masses, by prayers, and by almsgiving. Nor is it wonderful that we can do so, for even in this world a friend can make satisfaction for a friend.

—St. Thomas Aquinas

Everyone knows the meaning of Good Friday. But what about Holy Saturday?

Good Friday is the day we remember that Jesus died on the cross for our sins. The same is true of Easter Sunday, when everyone knows we celebrate that he rose from the dead in triumph over death.

Though it may have been a day of waiting for his disciples, Jesus was engaged in some of the most dramatic and important work of his messianic mission on Holy Saturday – and it took him to the depths of hell.

Wait, what? Jesus went to hell?

It’s right there in the ancient Apostles’ Creed: “[he] was crucified, died and was buried; he descended into hell; on the third day he rose again from the dead…” (It’s also in the Athanasian Creed.)

To properly understand what is going on here, there are two things you need to know:

First, when most people hear the word “hell,” they think of the hell of the damned, the place of eternal punishment for people who do not die in Christ. However, the term “hell” can sometimes have a broader meaning of “realm of the dead” for those who are not experiencing the vision of God.

This broader meaning certainly includes the hell of the damned, but can also include other places. For example, purgatory is a part of the broader realm of the dead but is separate from the hell of the damned.

Second, before the coming of Christ, there was at least one other part of the realm of the dead that no longer exists today, a place called “the limbo of the patriarchs.”

If, before Christ, a person died in friendship with God, they wouldn’t go to the hell of the damned to be punished, but they also couldn’t go to heaven because Christ had not yet made that possible. Instead, they went to a part of the realm of the dead without the punishments of the damned.

It is to the people of this place that Christ visited when he “descended into hell.”

As the Catechism explains:

So, after dying on the cross, Christ descended to the realm of the dead to proclaim to them that he had won their salvation and to lead them as the first entrants into heaven. Traditionally, this has included people like Adam and Eve, Saint John the Baptist, and his foster-father Saint Joseph.

This vitally important but often forgotten part of Christ’s mission is described most beautifully in an ancient sermon for Holy Saturday:

Here's the full text of the amazing sermon.

So don’t let Holy Saturday just be the day between Good Friday and Easter Sunday. Rather, contemplate Christ’s dramatic rescue mission in the realm of the dead, and praise God!

The chancellor-in-waiting says he would commit to giving Kiev long-range missiles if London backs him

Germany’s chancellor-in-waiting Friedrich Merz doesn’t officially take office until May 6, but that hasn’t stopped him from hitting the press circuit like it’s demolition day. Apparently, he’s got some lost time – and infrastructure – to make up for. 

In a chat with Germany’s public broadcaster, ARD, he floated the idea that Kiev, which seems to rank higher than Berlin on his priority list, needs to “get ahead of the situation” on the battlefield and “shape events” instead of playing defense. The event he seems most eager to shape? Oh, just the Third World War, apparently. Because he pivoted straight to the Kerch Bridge – mainland Russia’s lifeline to the Crimean peninsula – like it’s been living on borrowed time.

Merz said that “if for example, the most important land connection between Russia and Crimea is destroyed, or if something happens on Crimea itself, where most of the Russian military logistics are located, then that would be an opportunity to bring this country strategically back into the picture finally.” Cool, cool. Which picture would that be, exactly? The one labeled “Catastrophic Misjudgments of the 21st Century”?

Probably. Which is why Merz needs a useful idiot to ride shotgun alongside him in the doltmobile to share in any responsibility for the eventual mayhem when things inevitably go pear-shaped.

“You rang?” say the Brits. Or at least that’s what Merz is apparently hoping they say. “Our European partners are already supplying cruise missiles,” Merz said in an interview. “The British are doing it, the French are doing it, and the Americans are doing it anyway, this must be jointly agreed. And if it’s agreed, then Germany should take part.” 

Merz’s fellow Christian Democratic Party MPs have been floating the idea in the Western press that he’s waiting for an official permission slip from London.

It would probably read something like this: “Dear Herr Friedrich, You are hereby authorized to partake in a highly coordinated, militarized pub crawl. First stop: a punch-up with Russia, followed by a wobbly march to a greasy spoon for black coffee, bad lighting, and a collective hangover.”

“Ah, wunderbar!”

Merz is just days away from grabbing the wheel, and he’s done pretending to be the guy in the backseat yelling directions at Chancellor Olaf Scholz. Scholz, for his part, always said that Germany wouldn’t hand Kiev the Taurus long-range missiles. Not that he had much wiggle room after last year’s leaked audio from Russian intelligence of German Air Force brass workshopping ways to hit the Kerch Bridge without leaving any German fingerprints. Kind of a bad look for a guy who keeps overtly declaring that he wants peace. So naturally, he was furious. Which is why, if Team Scholz suddenly turned around now and said, “You know what? Let’s try a few long-range missile strikes, just for funsies,” people might reasonably assume that he’d undergone a surprise lobotomy with a NATO letter opener.

As the coalition partners for Merz’s incoming government, Scholz’s Social Democrats’ support would be needed on any vote. And so far, they’ve shown no interest in greenlighting his WW3 passion project. You know, democracy and all that.

Minor hiccup, I know. If military ambition and musings alone were all it took, Merz would already be well on his way to having a Netflix original named after him and maybe even a seat with his name on it waiting at The Hague.

But hey, hear the guy out. What if it’s, like, a group project? Das ist gut, ja?

Nah, dude. Nicht gut. Nicht gut at all.

What exactly does Team Merz think this would look like? Would the Brits and Germans sit side by side, fingers hovering over their respective missile buttons, doing a tense little “one, two, three, fire” and just praying that neither one flinches at the last second and leaves the other one with some very awkward phone calls to make?

If so, that would certainly explain why they’re talking about specifically needing Britain’s non-negotiable participation and not France – the country that trained a flagship brigade for the Ukrainian army, who apparently learned how to bail out before even seeing action. “Paris hailed it as a ‘unique’ initiative,” reported France24. Training 1,700 Ukrainians in France to fight who then just end up surrendering to the foie gras and rosé at the local café prior to deployment is ‘unique’, alright.

Britain isn’t exactly a great choice for a wingman either, though. If only because it says that its own participation in Ukraine is contingent on Washington holding its hand. “Europe must play its role, and I’m prepared to consider committing British forces on the ground alongside others, if there is a lasting peace agreement, but there must be a US backstop,” British Prime Minister Keir Starmer said in February.

So for those keeping score at home. For deeper involvement in Ukraine, Merz would need the Brits. The Brits would need Washington. And what would Washington need? For them all to knock it off. But apparently that memo got lost in their inbox among all the world war fantasy fiction.

“Pentagon figures recently questioned one ally about why it was still supplying weapons to Ukraine – a challenge that was ignored,” The Economist reported on April 15. ”Diplomats in Washington also report that some Trump aides say privately that they are ‘fed up’ with Europe’s effort to strengthen Ukraine.”

Doesn’t sound like Team Trump is up for holding hands as part of the West’s human chain in its reckless playground games against Russia. “Red Rover, Red Rover, send Putin right over!”

It’s hard to believe that there was a time not too long ago that Germany wasn’t trusted with the sharp knives, like nukes. Oh wait, it still isn’t. Technically, the Bundeswehr is still supposed to be defense only, but Merz seems determined to assemble just enough multilateral hand-holding to justify pulling out the long knives – the 500-kilometer-long ones, to be precise. If this is the new leadership model, then someone better put all the launch codes in a childproof box.

Inside This Week's Bull Bear Report

• Is Risk-Off Positioning Signaling A Market Low
• How We Are Trading It
• Research Report - Inflation Is Subsiding Rapidly
• YouTube - Before The Bell
• Market Statistics
• Stock Screens
• Portfolio Trades This Week

Trump Reignites Fed Feud

Last week, we discussed the "tariff reprieve" that sent stocks ripping higher in the 3rd largest one-day advance on record.

"As we said last week, any good news would cause the market to rally sharply. On Wednesday, President Trump announced a 90-day pause on the full effect of new tariffs. Interestingly, the same headline sent stocks surging on Monday but was quickly deemed "fake news" by the White House. I suspect that Monday was a "leak" by the White House to test the market response, and President Trump kept that announcement handy to stave off a further decline in the markets. Whatever the reason, the markets needed the break."

However, this week, the market was hit following a speech by Fed Chair Jerome Powell, in which he stated that the administration's tariffs could spark "higher inflation and lower growth." If that sounds familiar, it should. In 2021, Powell noted that inflation would be transitory as the money supply exploded by 42%. He was wrong then and is likely wrong again by fixating on hypothetical tariff shocks while ignoring the deflationary "red flags" from falling oil prices, slowing consumption, declining savings rates, and rising delinquencies.

Unsurprisingly, President Trump responded to Powell's comments very quickly, reminiscent of the feud between the two during 2018. In a post on Truth Social, President Trump wrote:

Trump is correct in his statement. The ECB's decision to cut rates for the seventh time was unanimous. Regardless of Powell's reason for his position, the stress on the financial system is increasing. As we noted last week, credit spreads are rising, and there is clear evidence that the economy is weakening as consumer demand softens. The Federal Reserve remains overly concerned about missing the inflation push in 2021 by not recognizing the impact of shuttering economic production and sending checks to households. As such, the Fed will likely be late once again in identifying the deflationary pressure of tariffs on economic growth. Of course, just as in 2018, the Fed began cutting rates quickly during 2019 to stem the "repo crisis". The Fed may be wrong again.

Technical Update

While the markets await the next Federal Reserve meeting, the uncertainty over monetary policy weighs on markets as much as the uncertainty about tariffs. This past week, the market reversed some of its gains from the massive "tariff reprieve" surge. With the MACD back on a buy signal and money flows turning positive, buyers are tepidly stepping back into the market. The 20-DMA continues to act as overhead resistance, defining the current downtrend. While there is undoubtedly a risk of another test of recent lows, which should be expected and why caution remains advisable, a break above the 20-DMA would lead to a rally to the 50-DMA. (Monday's article will address the "Death Cross" and what it means for investors.)

As is always the case, the market prices in current events and looks forward with more optimistic expectations. While there are many media headline-driven narratives, the tariffs are now a well-known factor, and markets have priced most of the impact into current prices and valuations. Furthermore, the bond market appears to have started resolving the recent "basis trade" blow-up, with bond yields and volatility declining.

Does that mean that the market is now devoid of risk? No. But, as we will discuss further in today's commentary, we may be closing in on a near-term market low.

Let's focus on a primary question: Is the market close to a bottom?

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The Art Of Contrarianism

You have likely heard the media stat that “bears are like a ‘broken clock,’ they are right twice a day.” While it may seem true during a rising bull market, the statement exposes the ignorance of those making such a claim. If you invert the logic, such things become more evident.

“If ‘bears’ are right twice a day, then ‘bulls’ must be wrong twice a day.”

The biggest problem for investors, and the “broken clock syndrome,” is the emotional biases of being either “bullish” or “bearish.” Effectively, when individuals pick a side, they become oblivious to the risks. One of the most significant factors is “confirmation bias,” where individuals seek confirmation and ignore non-confirming data.

As investors, we should be open to all the data, weigh incoming data accordingly, and assess the risk inherent in our portfolios. That risk assessment should be an open analysis of our current positioning relative to the market environment. Being underweight equities in a rising bull market can be as harmful as being overweight in a bear market.

We believe you should not be “bullish” or “bearish.” While being “right” during the first half of the cycle is essential, it is far more critical not to be “wrong” during the second half.

Howard Marks once stated that being a “contrarian” is tough, lonely, and generally right. To wit:

“Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, particularly when momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that ‘being too far ahead of your time is indistinguishable from being wrong.’)

Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.”

Emotions and volatility make us want to avoid the risk of loss. The increased price volatility and subsequent price decline created a substantially higher level of instability. That instability creates “fear” and drives investors to the behavioral bias of “loss aversion," ultimately leading to poor outcomes.

The fundamentally bearish arguments of valuations, earnings, a Fed policy mistake, and a recession are certainly viable outcomes. However, if “everyone” already expects those outcomes, what happens if something else occurs?

As Bob Farrell’s Rule Number 9 states:

“When all the experts and forecasts agree – something else is going to happen.

Here is some food for thought.

"The most fundamental premise of investing is to 'buy when everyone is fearful.' If excesses are built when everyone is on the same side of the trade, what should you do now?"

Risk Off Positioning Hits Extremes

We must evaluate the prevailing sentiment in the overall market to answer that question. Currently, market sentiment is extremely negative based on various measures, from investment positioning (what investors are doing in the market) to overall investor sentiment (how they feel about the market.}

For example, net bullish sentiment among retail and institutional investors is at some of the lowest levels on record, including during the "Financial Crisis." The extreme negativity is interesting because the recent decline was orderly and mild compared to the chaos during the financial crisis. Yet, investors are as bearish on the current market as they were then. However, it is worth noting that during previous instances when sentiment was as negative as it is currently, such readings were near market bottoms.

Furthermore, the sharp spike in the volatility index, which is considered a "market fear gauge," spiked to the highest levels seen since the COVID pandemic. If we combine the sentiment measures with the volatility index, we again see more extreme negative readings that often coincide with market lows rather than the beginning of larger reversions.

Other Measures Of Extremes

However, while our measures of fear and greed suggest that negative sentiment is reaching more extreme levels, other measures confirm the same. For example, the BofA survey of global investors intending to cut U.S. equities has been at its highest since the turn of the century. Such previous levels of negative sentiment on U.S. stocks have been a strong contrarian indicator for investors.

The same is shown by the rapid rotation out of U.S. stocks into foreign stocks. While many headlines are being written about that rotation, those duplicate headlines were written almost annually over the last 15 years. Due to strong economic and earnings forecasts, that rotation reverted into U.S. equities each time. In other words, the extremes in "sentiment" away from the U.S. were close to periods when investors should have been buying domestic equities.

However, the current levels are generally consistent with market lows, even when we return our focus to just U.S. equity positioning.

We see the same issue with professional funds that employ trading algorithms to manage equity exposure, which has also been reduced to levels more consistent with market lows rather than continued corrections.

Lastly, institutional funds based on volatility control have also cut exposures sharply.

With equity exposures very low, if there is any "good news" forthcoming, either economically, politically, or earnings-wise, the chase by these fund managers to increase equity exposure will fuel a significant rise in the market. For most investors, by the time they realize the correction is over, it will be far too late to take advantage of the opportunity.

Risk-Off Technical Indicators Also Suggest A Potential Low

When overall risk-off sentiment and positioning are at levels normally coincident with market bottoming processes, the technical indicators have also become so risk-off that they signal risk-on behavior. As we discussed earlier this week, Sentimentrader.com had a great breakdown of various technical indicators, all hitting extremely low levels. Those indicators run the relative strength, breadth, and market momentum gamut.

Sentimentrader tracks 21 indicators in total, which are then combined into a single indicator, giving readings of when markets are trading at more extreme bullish or bearish levels. As shown, the market is currently trading at more extreme risk-off levels. While this does not mean the market is about to rise, historically, such extreme readings have been close to market bottoms.

As Sentimentrader.com notes:

“Declines in the Risk On/Risk Off indicator below 35 have been associated with volatile periods in the market involving significant declines. “Playing defense” during these periods can, at times, help investors avoid some of the financial and psychological pain of riding significant drawdowns to the bottom fully invested. However, this indicator has gone so far to the unfavorable extreme that it might be “so bad that it’s good.”

Historically, when indicators reach such extreme levels, most previous advances or declines are likely complete. However, it does not mean that markets can not go even further into extremes before reaching a bottom. As Sentimentrader.com concluded:

“The good news is that – on a standalone basis – the signal and performance highlighted above make a compelling favorable case for stocks. The bad news is that we would never advise basing portfolio decisions on any one indicator or indicator signal. The proper message from the results above is NOT “All clear for stocks, and happy days are here again.” The proper message is “Ignore the bearish noise, manage risk, and keep an open mind to the potential for better results moving forward – but especially manage risk.”

We agree. Investors usually make psychological investment decisions during market declines to avoid further losses. That is entirely understandable, but as discussed previously, it is one of the leading causes of long-term underperformance.

We Are The Enemy, And The Enemy Is Me

The lesson is that headlines drive sentiment, and rallies can form when sentiment becomes too negative, as may be the case today. Does this mean the next major bull market rally is set to begin? No. But it does suggest that there are such high levels of negative sentiment that selling today will likely be a mistake.

The most significant problems for individuals are the “herding effect” and “loss aversion.” Notably, “loss aversion” is one of the leading factors influencing investment decisions, according to a survey from the CFA Institute.

“Loss aversion is a tendency in behavioral finance where investors are so fearful of losses that they focus on trying to avoid a loss more so than on making gains. The more one experiences losses, the more likely they are to become prone to loss aversion.” – Corporate Finance Institute

Unsurprisingly, investor psychology is one of the most significant reasons individuals consistently fail to achieve their investment goals. Our behavioral traits plague our investment decision-making.

Here is one last example. Price volatility, particularly when prices are declining rapidly, elicits our emotional response of panic. However, while rising volatility from low levels is a risk-off warning, high levels of volatility have often been a risk-on indicator. When the VIX closes above 45, which signals extreme investor fear, it has historically marked strong long-term buying opportunities. Following such spikes, the S&P 500 has more than doubled on average over five years, significantly outperforming periods of lower volatility. Opportunistic rebalancing during these dislocations can enhance long-term portfolio resilience.

George Dvorsky once wrote that:

“The human brain is capable of 1016 processes per second, which makes it far more powerful than any computer currently in existence. But that doesn’t mean our brains don’t have major limitations. The lowly calculator can do math thousands of times better than we can, and our memories are often less than useless — plus, we’re subject to cognitive biases, those annoying glitches in our thinking that cause us to make questionable decisions and reach erroneous conclusions.“

In other words:

“The most dangerous element to our success as investors…is ourselves.”

As a contrarian investor, excesses get built when everyone is on the same side of the trade.

From that basis, while it is easy to be very negative about the market currently, everyone is so bearish that the markets could respond in a manner no one expects.

We are not saying it will be the case, but we should be very open to the possibility.

How We Are Trading It

The problem with being a contrarian is determining where you are during a market cycle. The collective wisdom of market participants is generally “right” during the middle of a market advance but “wrong” at market peaks and troughs. Therefore, there are some actions we can take to navigate the uncertainty.

1. Move slowly. There is no rush to make dramatic changes. Doing anything in a moment of “panic” tends to be the wrong thing.
2. If you are overweight equities, DO NOT try to fully adjust your portfolio to your target allocation in one move. Again, after significant declines, individuals feel like they “must” do something. Think logically about where you want to be and use the rally to adjust to that level.
3. Begin by selling laggards and losers. These positions were dragging on performance as the market rose, and they led the way down.
4. Add to sectors, or positions, that are performing with or outperforming the broader market if you need risk exposure.
5. Move “stop-loss” levels up to recent lows for each position. Managing a portfolio without “stop-loss” levels is like driving with your eyes closed.
6. Be prepared to sell into the rally and reduce overall portfolio risk. You will sell many positions at a loss simply because you overpaid for them. Selling at a loss DOES NOT make you a loser. It just means you made a mistake.
7. If none of this makes sense, please consider hiring someone to manage your portfolio. It will be worth the additional expense over the long term.

Just remember:

“In good times, skepticism means recognizing the things that are too good to be true; that’s something everyone knows. But in bad times, it requires sensing when things are too bad to be true. People have a hard time doing that. The things that terrify other people will probably terrify you too, but to be successful, an investor has to be a stalwart. After all, most of the time the world doesn’t end, and if you invest when everyone else thinks it will, you’re apt to get some bargains.“

Feel free to reach out if you want to navigate these uncertain waters with expert guidance. Our team specializes in helping clients make informed decisions in today’s volatile markets.

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Bull Bear Report Market Statistics & Screens

SimpleVisor Top & Bottom Performers By Sector

S&P 500 Weekly Tear Sheet

Relative Performance Analysis

Stocks had another volatile week of trading as the bond market remains pressured by the leverage unwind. The good news is that the market is not overbought. The bad news is that the markets aren't oversold yet. While risk is subsiding in the near term, there is a lack of a catalyst to move stocks higher. Some good news on the tariff front or better-than-expected earnings over the next two weeks could certainly provide some needed relief. However, by the end of the month, stock buybacks return, which will give some support to equities headed into May.

Technical Composite

The technical overbought/sold gauge comprises several price indicators (R.S.I., Williams %R, etc.), measured using “weekly” closing price data. Readings above “80” are considered overbought, and below “20” are oversold. The market peaks when those readings are 80 or above, suggesting prudent profit-taking and risk management. The best buying opportunities exist when those readings are 20 or below.

The current reading is 23.51 out of a possible 100.

Portfolio Positioning “Fear / Greed” Gauge

The “Fear/Greed” gauge is how individual and professional investors are “positioning” themselves in the market based on their equity exposure. From a contrarian position, the higher the allocation to equities, the more likely the market is closer to a correction than not. The gauge uses weekly closing data.

NOTE: The Fear/Greed Index measures risk from 0 to 100. It is a rarity that it reaches levels above 90.

The current reading is 45.35 out of a possible 100.

Relative Sector Analysis

Most Oversold Sector Analysis

Sector Model Analysis & Risk Ranges

How To Read This Table

• The table compares the relative performance of each sector and market to the S&P 500 index.
• “MA XVER” (Moving Average Crossover) is determined by the short-term weekly moving average crossing positively or negatively with the long-term weekly moving average.
• The risk range is a function of the month-end closing price and the “beta” of the sector or market. (Ranges reset on the 1st of each month)
• The table shows the price deviation above and below the weekly moving averages.

The recent correction has pushed most markets and sectors below their normal risk ranges. Gold is exceedingly overbought and deviated from long-term averages. Look to take profits and rebalance risks accordingly. With most markets and sectors on bearish crossover signals, the market likely has more work to do before the current correction process is complete. Continue to carry higher levels of cash and hedges for now.

Weekly SimpleVisor Stock Screens

We provide three stock screens each week from SimpleVisor.

This week, we are searching for the Top 20:

• Relative Strength Stocks
• Momentum Stocks
• Technical Strength W/ Dividends

(Click Images To Enlarge)

RSI Screen

Momentum Screen

Technically Strong With Dividends

SimpleVisor Portfolio Changes

We post all of our portfolio changes as they occur at SimpleVisor:

Apr 14th

Oil has been extremely beaten up lately, with concerns over tariffs, slowing economic growth, and falling inflation. Likewise, energy stocks, which we sold over a month ago, have also been hit hard, with many trading three standard deviations below their means. We are picking up a trading position in energy stocks for a potential rally over the next few weeks. We will evaluate those positions regularly and rebalance them as needed. We are also running fairly tight stops in case the trade fails.

Equity Model

• Add 1% of the portfolio each in Exxon Mobil (XOM) and Diamondback Energy (FANG)

ETF Model

• Add a 2% position in the iShares Energy ETF (XLE)

Lance Roberts, C.I.O., RIA Advisors

The post Is Risk Off Positioning Signaling A Market Low? appeared first on RIA.