Obviously uncertainty is extremely high at the moment and so is the question of whether the market has bottomed or the powerful rally the last two days represents a bear market rally. From the standpoint of technical analysis, it is still to be determined as all the trading action of the last two weeks has taken place within the range of the candle established on Wednesday April 9 when Trump announced a 90 day pause in the tariffs he’d announced the previous Wednesday resulting in a massive intraday rally. In other words, I think the market is correctly still waiting to see how the current iteration of the trade war with China plays out – which will unfold over the next few months.

As I mentioned on April 9 in “The State of the Market After Wednesday’s Face Ripper”, the market was already breaking down before Liberation Day (April 2) – the day Trump announced his massive tariffs. That suggests there are other factors besides the trade war involved in the markets downward trajectory since the February 19 top. One of those factors may be a slowdown in the economy.

Chipotle’s (CMG) 1Q25 earnings announced Wednesday after the close suggest this might be the case. CMG announced a rare negative comp (-0.4%) – the first since the Covid Quarter (2Q2020). With 3,781 stores as of the end of 1Q25 and $11.3 billion in sales in 2024, CMG – one of, if not the, most popular fast casual restaurants in the country – is a macro tell on consumer spending IMO and CEO Scott Boatwright did reference a “slowdown in consumer spending” as one of the causes of the weak quarter.

Gold has been a refuge during the last couple months but it got a little too hot to handle and corrected hard the last two days. That was to be expected. Whether this is a short term or long term top is to be determined. Personally, I believe it is the former and have not sold any of my precious metals holdings.

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