Today’s update will cover:

• The S&P 500 is following a familiar path.

• What’s fueling the stock market to record highs.

• The next commodity sector that could breakout.

• A huge risk fr…

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Now for this week’s issue…

Uncertainty continues to hang over the Middle East as the U.S. and Iran have yet to announce any major breakthrough in peace talks. At the same time, the flow of energy products flowing through the Strait of Hormuz remains stalled.

Investors also have to contend with a pending leadership change at the Federal Reserve. Kevin Warsh, who is the nominee to replace Fed Chair Jerome Powell, answered questions at his confirmation hearing before the Senate this week.

Warsh pledged to change the way the central bank communicates with the public, while dodging questions on the path of interest rates. The path to chair the Fed also became clearer following a decision by the Department of Justice to drop its investigation into Powell.

Despite the uncertain outlook for energy-driven inflation and monetary policy, investors are rushing back into the stock market. The S&P 500 is holding near record highs over the 7,100 level (chart below).

Semiconductor stocks in particular are leading the way higher, with an ETF tracking the sector posting 18 daily consecutive gains in a row. Intel’s stock had it single best daily gain since 1987 and jumped past the dot-com peak in 2000.

With the S&P back to making record highs, extended market valuations are a cause for concern. But forward earnings estimates are surging higher, providing a key catalyst to keep the rally intact for now.

This week, let’s look at the unusual move in earnings estimates looking ahead and why that’s becoming an important driver of the rally. We’ll also look at an alternative asset allocation portfolio having a banner year and why a big test could be waiting for Warsh.

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The Chart Report

With the S&P 500 and Nasdaq back at record highs, that means valuations remain stretched above historical averages and that earnings growth will be critical to support gains in the indexes going forward. While there is significant uncertainty from the ongoing war in the Middle East and surging energy prices, forward earnings estimates are doing something peculiar. Earnings revisions for 2026 are now up approximately 4% since the start of the year (green line in the chart below), which compares to the typical revision that drifts lower based on historical data. With the first quarter reporting season about to pick up, it will be crucial to monitor forward earnings estimates for any changes in trend since the start of the year.

While the surge in the S&P 500 is catching many investors by surprise, the index is following a familiar path following geopolitical conflict. The chart below plots the performance of the S&P leading up to major geopolitical events and the forward returns following conflict. A drawdown just after the emergence of a conflict is typically resolved quickly to the upside. The blue line shows the current path for the S&P following the Iran war, with the index closely tracking historical precedent.

The recovery in the S&P 500 and surge in commodity prices is sending one asset allocation model to its best return since 1933. A “permanent portfolio” consisting of an equal allocation to stocks, bonds, commodities, and cash is currently tracking an annualized gain of 26% this year (chart below). The synchronized rally across various assets classes along with relatively high rates across the yield curve is delivering a boost to the alternative asset allocation, which is having its third best ever relative performance to the traditional 60/40 portfolio of stocks and bonds.

Kevin Warsh was on Capitol Hill for confirmation hearings as part of his nomination to be the next Fed chair. But a major obstacle in his way to the position resided with the Department of Justice and their ongoing investigation into current chair Jerome Powell. But news broke this week that the investigation will be dropped, which clears the way for Warsh to take control. New Fed chairs have a history of being greeted with market volatility. The chart below shows maximum drawdowns for periods following new Fed chairs taking office. The average drawdown is 20% during the year following a new Fed chair.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• The easy money rally has run its course.

• The median S&P 500 stock remains in correction.

• How to use liquidity to evaluate trading environments.

• The price action in Bitcoin is a warning on the outlook.

• The fundamental metrics favoring this energy stock setup.

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Trade Idea

YPF SA (YPF)

Massive basing structure going back over a year and recently testing the high end of the range. Series of smaller pullbacks underway since December with the stock forming a MACD hook. I’m watching for a move over $49.

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Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

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Stock Market Update

A rally in the S&P 500 that took the index to record territory over the 7,000 level is also one of the strongest 10-day gains in history. The 9.8% rally in the S&P over 10 days to mid-April ranked among the 20 strongest ever. Extremely bearish positioning by institutional funds such as CTA’s and risk-parity strategies likely played a significant role in the gains since the end of March, with one estimate pegging a recent five-day equity purchase at $86 billion for CTAs which would rank as one of the largest buy programs in history. The unwind of bearish positions has run its course, with overall estimates of positioning now running near neutral levels (chart below).

With the S&P 500 and Nasdaq back at record highs, that means valuations remain stretched above historical averages and that earnings growth will be critical to support gains in the indexes going forward. While there is significant uncertainty around the impact to consumer spending and expenses incurred by various businesses from the ongoing war in the Middle East and surging energy prices, forward earnings estimates are doing something peculiar. Earnings revisions for 2026 are now up approximately 4% since the start of the year (green line in the chart below), which compares to the typical revision that drifts lower based on historical data. With the first quarter reporting season about to pick up, it will be crucial to monitor forward earnings estimates for any changes in trend since the start of the year.

Earnings growth will be a necessity to driving the rally further, and is a significant factor in fueling chart breakouts among individual equities as well. That’s why you’ll find most of the chart setups shared below belong to companies in the midst of strong revenue and earnings growth along with positive analyst revisions.

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Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

Today’s update will cover:

• The easy money rally has run its course.

• The median S&P 500 stock remains in correction.

• How to use liquidity to evaluate trading environments.

• The pric…

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Now for this week’s issue…

Conflicting reports on the status of peace talks between the U.S. and Iran along with uncertainty over the flow of ship traffic through the Strait of Hormuz is setting up a volatile week ahead.

The S&P 500 surged to another record high to end last week, with a 12.3% overall gain in just the past 13 sessions. The strong finish to the week followed reports that peace talks between the U.S. and Iran were making solid progress while the Strait of Hormuz appeared to be open for tanker traffic.

The gains in the S&P 500 over a short stretch pushed the index to historical records. The S&P swung from an oversold to overbought reading in just 11 days, making it the second fastest rally since 1950 (table below).

Oil prices also collapsed to close out the week on signs that energy markets could return to a more normalized state. But in a quick turn of events, headlines emerged over the weekend that Iran had once again closed the Strait with several ships coming under attack.

The sudden change in events has characterized the Middle East conflict since it started at the end of February. And it appears that intensifying hostilities could unwind the bullish action over the past few weeks.

Simply following breadth, sentiment, and positioning by institutional investors helped flag the recent rally. At the same time, warning signs were already emerging as the S&P 500 broke out to record highs.

The number of stocks breaking out to new highs is failing the confirm the move in the indexes, while buying pressure from a key group of institutional investors has largely run its course.

This week, let’s look at the historically strong gains for the S&P and a key driver behind the move. We’ll also look at one concerning development on the market’s move to record highs and tailwinds that could emerge in the month’s ahead.

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The Chart Report

After finding a low on March 30, the S&P 500’s rally accelerated when a ceasefire was announced between the U.S. and Iran. That’s when the S&P gapped higher above both the 50- and 200-day moving average (MA) in a single session. As tensions have continued easing (until this weekend), the S&P has kept building on the gains and is up 12.3% in just 13 trading sessions. During that span, the S&P has swung from an oversold to an overbought condition based on the Relative Strength Index (RSI) as you can see in the chart below. That’s the second fastest move from an oversold to overbought condition since 1950.

The rally off the late March low was sparked by extremely bearish positioning built by institutional investors that use momentum and volatility as inputs to drive equity exposure. CTA’s and other risk-parity strategies established one of the largest short positions of the past decade, which created the conditions to see a massive short-covering rally. At one point last week, it was estimated that CTA’s bought more than $86 billion in equity exposure which is one of the largest purchases on record. CTA’s are modelled to continue adding exposure in the week ahead, but that could change if volatility levels pick up. At the same time, the CTA positioning catalyst has been significantly exhausted.

While indexes like the S&P 500 are jumping to new record highs over the past week, participation in the rally has been lacking. On the first day of record highs above the 7,000 level, only 12 stocks in the S&P were making new 52-week highs. That’s among the five lowest instances of participation when the S&P 500 is making a new high since 1999. The chart below plots the number of stocks within the S&P making a new high when the index closes at a record going back to the late 1980s. At the same time, a wide dispersion remains between the S&P’s record level and the median level of constituents remaining in a drawdown. That’s not to say the average stock can’t catch up to the indexes, but is a condition to monitor in the week ahead.

The rally in the S&P 500 is being supported by historical seasonality trends. The period from early March through the end of April has been a strong period for the S&P based on seasonal trends for the past 20 years. Strength this time around didn’t emerge until the end of March, with the recent jump aligning more closely with what’s seen during the four-year presidential election cycle. The chart below plots the S&P across the presidential election cycle using data going back nearly a century. Mid-term election years tend to see the first peak on April 17, which would line up with the S&P’s advance to another record high this past Friday. Based on historic trends, the S&P would pull back into late September before the rally resumes during the fourth quarter.

Against the backdrop of geopolitical uncertainty and stock market volatility, it’s worth tracking global liquidity trends and how that’s impacting asset prices. While the rate of change in M2 liquidity in the U.S. is still moving higher, we should be seeing the peak in global liquidity if the 65-month cycle continues tracking as shown in the chart below. Rising global liquidity has been a tailwind for risk assets, with the most recent upswing of the cycle happening alongside the lows seen in 2022’s bear market. With the peak in the cycle underway, it’s worth following assets most sensitive to liquidity trends to confirm the cycle including the highs in Bitcoin seen late last year.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• Is the next inflation wave underway?

• Why the stock market rally has room to run.

• A major difference in the S&P 500 versus the trade war.

• One energy stock that’s forming a new breakout pattern.

• Will this semiconductor stock finally catchup to the sector?

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Trade Idea

Energy Fuels (UUUU)

Uranium and rare earths stock that peaked near $25 in October and is forming a new pattern. The stock is making a smaller pullback since late January after a test of resistance. The MACD needs to recover back above zero while I’m watching for a move over $25.

Key Upcoming Data

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Come join us over at the Hub as we seek to capitalize on stocks and ETFs that are breaking out!

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And if you have any questions or feedback, feel free to shoot me an email at mosaicassetco@gmail.com

Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.

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Stock Market Update

The stock market is having one of its strongest periods in history, with the S&P 500 up 10.7% over the past 11 trading sessions. It ranks as the fifth quickest recovery to record highs following a deep pullback. The S&P closed firmly above the 7,000 level for the first time in history despite the ongoing uncertainty in the Middle East that sparked a 9% drawdown in the index into late March. I’ve argued that bullish conditions for a rally formed after a key group of institutional investors (CTAs and risk-parity) built up extremely bearish positions. What you’re seeing now is a positive feedback loop as improving momentum and falling volatility draws fund flows back into the market.

But there are reasons to be skeptical about the durability and longevity of current rally. One has to do with seasonal trends, where a period of bullish seasonal tailwinds peaks later this month and doesn’t resume until July based on the past 20 years of calendar returns. A drawdown could be more pronounced if the presidential cycle continues tracking in the chart below. You can see that the S&P 500 tends to find its peak about now ahead of mid-term elections, and then recovering during the final quarter of the year.

I would not base any investment decision or outlook based on seasonals alone, which is why I’m also watching confirmation from breadth. I’ve previously noted to Hub members that advance/decline stats coming off the late March low have been lackluster and failed to trigger any meaningful breadth thrust metrics despite the sharp gains. Participation by the average stock is also lagging the indexes on the rebound. The equal-weight S&P 500 remains below its record high and is not confirming the cap-weighted S&P’s new record. The NYSE advance-decline line in the chart below is another way to track the performance of the average stock. It’s also failing to confirm the new high in the S&P.

The breadth divergences noted above are short-term in nature at this point and the average stock could catch up in the days/weeks ahead. But it’s worth noting especially as seasonal tailwinds go away and I’ve noted the absence of high quality setups, which is a big change coming off the lows in April last year. We’re still adding a couple new positions over the past week, but will continue being very selective in our chart setups.

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Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

Today’s update will cover:

• Is the next inflation wave underway?

• Why the stock market rally has room to run.

• A major difference in the S&P 500 versus the trade war.

• One energy stoc…

Read more

If you find this report helpful please hit that “like” button, share this post, and become a subscriber if you haven’t already done so!

🚨And be sure to check out Mosaic Traders Hub. It’s a members-only platform to alert trade ideas, track a model portfolio of open positions, and further analyze the message coming from the capital markets.

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Now for this week’s issue…

A two week ceasefire between the U.S. and Iran delivered the spark that ignited bullish conditions recently building across positioning and sentiment data.

A combination of oversold breadth, positive divergences, and bearish sentiment and positioning provided the right ingredients to see a massive rally unfold. The drop in equity market volatility (VIX chart below) is creating a positive feedback loop to send equity prices higher.

The strong gains come on the one-year anniversary of another geopolitical shock driving uncertainty across the global economy. In early April 2025, the S&P 500 experienced a V-bottom following a pause on tariffs around the trade war.

While the circumstances around geopolitical volatility feels familiar, there are key differences between the rebound seen a year ago and what’s unfolding now, including much weaker participation.

This past week also delivered a reminder that inflation promises to become a bigger issue in the months ahead, with the Consumer Price Index (CPI) jumping to the highest level seen in two years.

While energy prices like oil have come off the highs following the ceasefire, prices remain well above levels before the conflict. There’s also the threat of higher food prices ahead due to the impact on fertilizer supplies from the Middle East conflict.

And although equities are rebounding, interest rate markets are hardly reversing the increase in yields seen following the outbreak of war, which is another factor that could limit the longer-term gains seen in stock prices.

This week, let’s look at key levers that could keep driving inflation higher in the months ahead, and how that’s impacting one key chart tracking interest rates. We’ll also look at bearish positioning by institutional investors, and why the unwind could support stocks over the near-term.

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The Chart Report

While headlines coming out of the Middle East are capturing investor attention, a pair of consumer inflation reports released last week continues showing upward pressure on prices. The CPI for the month of March came in at 3.3% compared to last year, which was the biggest jump since early 2024. The Fed’s preferred measure is the Personal Consumption Expenditures (PCE) price index, which was released for the month of February. The core figure that removes food and energy prices increased 3.0% year-over-year, while more recent annualized rates over the past three- and six-months are accelerating higher (chart below). That shows inflation pressures outside of what’s expected following war in the Middle East and impact on energy prices.

The CPI inflation report for March is the first that captures the move in energy prices following the war with Iran. Gas prices jumped by 21.2% during the month, which is the largest gain in the history of the series going back to 1967. While investors are focused on energy’s impact to inflation looking ahead, more evidence is emerging on the impact of last year’s trade war on the price of goods. A study be researchers at the Fed shows the estimated impact of tariffs on core goods prices in the PCE price index. The chart below shows the published data (black line) compared to estimates excluding the impact of tariffs (blue line). While the economists behind the research estimate that the pass through impact of tariffs is complete, uncertainty on the inflation outlook now shifts to energy prices.

Investors should also monitor the impact of fertilizer shortages on food prices in the months ahead. The Middle East is a key producing region of ingredients used in farm fertilizers, which have also been impacted by tanker traffic through the Strait of Hormuz. Higher fertilizer prices has a direct impact on food prices, while fertilizer shortages could impact crop yields as well. Concerns on the impact have led President Trump to recently warn against price gouging by major fertilizer producers. The chart below overlays an index of food prices (black line) against an index of fertilizer prices (red line). You can see that rising fertilizer and food prices played a role during the last inflation wave into mid-2022, with fertilizer prices tracking higher once again.

Uncertainty over the inflation outlook is having a major impact on interest rate markets. The 2-year Treasury yield crossed above the fed funds rate for the first time in 3 years, which could signal a pivot by the Fed to tighter monetary policy in the months ahead. On the longer end of the yield curve, the 30-year Treasury is close to a key breakout in the chart below. The 30-year is trading in an ascending triangle pattern since 2023 and is currently making a smaller pullback off the 5% resistance level. A breakout would put the 30-year at the highest level since 2007.

While the two week ceasefire between the U.S. and Iran is on fragile ground, that catalyst was enough to send stock prices soaring as bearish positioning was pushed to extremes. Positive breadth divergences were hinting at a turnaround over the last couple weeks, with an unwinding of massive short positions by institutional investors driving a buying spree. CTAs are systematic investors that incorporate variables like stock price momentum and volatility to drive equity exposure. Their exposure was recently pushed to negative extreme as you can see in the chart below, with the unwind underway still in the early stages. If market volatility remains contained, CTAs could be facing their second largest buy estimate on record over the coming week.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• The long-term risk from commodity prices.

• The near-term opportunity brewing in stocks.

• The market’s similarities to 2022’s bear market.

• Why the traditional retirement portfolio could get rocked.

• One stock about to see a massive acceleration in earnings.

You can follow everything we’re trading and tracking by becoming a member of the Traders Hub.

By becoming a member, you will unlock all market updates and trade alerts reserved exclusively for members.

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Trade Idea

Advanced Micro Devices (AMD)

AMD is forming a new basing pattern after breaking above $200 in October. The stock is back testing that level as support several times while forming a new resistance level near $270. I’m watching for a breakout over $270.

Key Upcoming Data

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I hope you’ve enjoyed The Market Mosaic, and please share this report with your family, friends, coworkers…or anyone that would benefit from an objective look at the stock market.

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Come join us over at the Hub as we seek to capitalize on stocks and ETFs that are breaking out!

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And if you have any questions or feedback, feel free to shoot me an email at mosaicassetco@gmail.com

Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.

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Stock Market Update

A (fragile) two week ceasefire between the U.S. and Iran delivered the spark that ignited bullish conditions recently building. The combination of oversold breadth, positive divergences, and bearish sentiment and positioning provided the right ingredients to see a massive rally unfold. As I highlighted in Sunday’s Market Mosaic, the presence of positive breadth divergences was only adding to the bullish setup over the near-term. The ceasefire and potential reopening of the Strait of Hormuz helped drive a massive rebound that saw the S&P 500 recover key moving averages (MAs) on a huge opening gap. The chart below shows the S&P gapping above both the 200-day MA (green line) and 50-day MA (black line) in a single trading session.

The situation might feel familiar with the one-year anniversary of the stock market’s recovery from the trade war and subsequent pause on tariffs. While follow through on the rebound remains to be seen, it’s worth noting that breadth statistics on yesterday’s advance fell well short of the thrusts trigged one year ago. The chart below shows the ratio of advancing stocks to declining stocks on the NYSE. That ratio finished the day at 4.4 compared to 37.2 last year that helped trigger several breadth thrust indicators, which typically bodes well for the S&P 500’s forward returns looking ahead on longer time frames.

While the underwhelming A/D performance doesn’t have as positive implications for longer-term returns, the recent cluster of strong A/D ratios could help the S&P 500 follow through on a strong period of seasonality that runs through April. We added several positions to the model portfolio to take advantage of breakouts.

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Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

If you find this report helpful please hit that “like” button, share this post, and become a subscriber if you haven’t already done so!

🚨And be sure to check out Mosaic Traders Hub. It’s a members-only platform to alert trade ideas, track a model portfolio of open positions, and further analyze the message coming from the capital markets.

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Now for this week’s issue…

During a speech that was widely anticipated to ratchet down tensions with Iran, President Trump instead maintained rhetoric that the campaign still has weeks to run and military strikes would intensify.

The remarks came during a primetime address to the nation, which served to pause a rally attempt by the S&P 500 mid-week. Uncertainty over tanker flow through the Strait of Hormuz kept oil prices near their highest level since the conflict began.

But amid the headlines, there are key reports suggesting an improvement in economic activity in recent months. The ISM manufacturing survey remained above 50 in March, where a reading over 50 indicates expansion.

The leading new orders component of the survey expanded for the third consecutive month with March coming in at 53.5. Another key area of the economy also showed a jump in activity last month.

Nonfarm payrolls for the month of March rose by 178,000, which was well ahead of estimates for 59,000. The three- and six-month average payroll growth are showing signs of inflecting higher after stalling near zero for the past several months (chart below).

It remains to be seen if recent momentum in economic data will be impacted by the conflict in the Middle East, but signs of activity that supports the earnings outlook would help stabilize stock prices.

There’s also evidence from breadth metrics that the average stock is diverging positively from the S&P 500 while positioning and survey-based indicators show sentiment remains extremely bearish, which is a positive contrarian signal.

This week, let’s look at evidence that the economy is showing signs of improving and if the conflict in the Middle East is going to alter the positive trajectory. We’ll also look at positive breadth divergences hinting at a rebound in equities, and how short exposure could help to fuel a rally.

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The Chart Report

Recent economic data is showing a positive inflection across various metrics. The March payrolls report came in much better than expected and is driving short-term average job creation higher relative to the stall speed emerging last year. Leading indicators like the ISM Manufacturing’s new orders component has stayed in expansion territory. Comments from corporate executives on earnings calls has been hinting at an improving economy as well. The chart below plots the new orders component (white line) against an index of companies discussing an economic recovery on their earnings calls (orange line). You can see that discussion of a recovery has been gaining traction in recent quarters and is leading the turn higher in new orders.

An improvement in economic data was occurring mostly before the outbreak of conflict in the Middle East and surge in energy prices. Negative business sentiment and uncertainty around consumer spending are major risks to the economic outlook. The best case scenario was a quick resolution to the war and subsequent reopening of the Strait of Hormuz that allowed energy exports from the Middle East to resume. But as the conflict looks set to continue, oil prices have remained near their highs following the war. The chart below plots the estimated impact to real GDP growth based on the level of oil prices. GDP was running at a baseline of 2.4% before the conflict. If prices remain near the $100 per barrel level, GDP growth could dip to 1.6% and jeopardize the outlook for corporate earnings.

Not all of the underlying components of the ISM’s manufacturing survey portrayed a positive outlook for the economy. Following the jump in oil prices and potential spillover impact from fertilizer shortages on food prices, challenges around the inflation outlook still poses a major risk. The prices paid component of the ISM’s manufacturing survey measures costs for raw materials, and covers a time period following the war in the Middle East. The ISM prices paid jumped to 78.3 (blue line) which is the highest level since June 2022. Back then, the Consumer Price Index (red line) surged to an annual increase of 9%. You can also see in the chart that prices paid tends to lead changes in CPI.

With no signs of de-escalation in hostilities between the U.S. and Iran, the implications for the inflation and economic outlook continues weighing on stock prices. The S&P 500 fell below the 200-day moving average for the first time since last year’s trade war and dropped to the lowest level since August. But there is evidence that the average stock is holding up better than the major indexes with the presence of positive breadth divergences. The chart below plots the McClellan Oscillator applied to the NYSE, which tracks the trailing difference between advancing and declining stocks on the NYSE. You can see that the oscillator is making a series of higher lows since early March and is crossing into positive territory.

At the same time that positive breadth divergences are emerging, a combination of oversold conditions and bearish positioning could help spark a rally and be boosted by a positive feedback loop. The chart below shows net positioning in global equities by hedge funds. Those institutional investors have been cutting exposure steadily in recent months, with a surge in net short positioning last month. That brought exposure to the largest net short position (based on z-score) in over 10 years, where signs of recovering stock index momentum could trigger a rush of buying pressure to cover short positions.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• The long-term risk from commodity prices.

• The near-term opportunity brewing in stocks.

• The market’s similarities to 2022’s bear market.

• Why the traditional retirement portfolio could get rocked.

• One stock about to see a massive acceleration in earnings.

You can follow everything we’re trading and tracking by becoming a member of the Traders Hub.

By becoming a member, you will unlock all market updates and trade alerts reserved exclusively for members.

Subscribe now

Trade Idea

Warrior Met Coal (HCC)

The stock is setting up a new base right at the important $100 level. A smaller pullback is underway following a rally to test resistance. The setup needs more time to see the MACD reset before trying to break above $100.

Key Upcoming Data

Economic Reports

Earnings Reports

I hope you’ve enjoyed The Market Mosaic, and please share this report with your family, friends, coworkers…or anyone that would benefit from an objective look at the stock market.

Share

Become a member of the Traders Hub to unlock access to:

✅Model Portfolio

✅Members Only Chat

✅Trade Ideas & Live Alerts

✅Mosaic Vision Market Updates + More

Our model portfolio is built using a “core and explore” approach, including a Stock Trading Portfolio and ETF Investment Portfolio.

Come join us over at the Hub as we seek to capitalize on stocks and ETFs that are breaking out!

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And if you have any questions or feedback, feel free to shoot me an email at mosaicassetco@gmail.com

Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

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Stock Market Update

The S&P 500 just posted its worst quarter since 2022, with a drawdown hitting both equity and bond markets to start the year. But a combination of oversold conditions and bearish positioning helped spark a rally that could be boosted by a positive feedback loop. The catalyst for the rally came from comments by President Trump that an end to the war with Iran was within sight, while negotiations with Iran at least appear to be materializing. That was enough to spark a sharp rebound in equities, especially given that a key category of institutional investors had pushed bearish positioning to extremes seen around episodes like last year’s trade war and the depths of the pandemic selloff (chart below). Moderating volatility levels and improving momentum could continue helping draw institutional fund flows back into the market.

With oversold breadth and bearish sentiment reflected in both positioning and survey data, it’s no surprise to see at least a relief rally take hold. It’s also worth remembering that a period of positive seasonality runs through the end of April for the S&P 500. But a longer-term recovery in the stock market will come down to the rate outlook on both the short- and long-end of the yield curve. Based on comments from Federal Reserve Chair Jerome Powell and market-implied odds, the Fed looks set to keep rates on hold for now while the 30-year Treasury yield hovers near the highest level since 2007. Challenges on the inflation outlook still poses a major risk, especially with the prices paid component of the ISM’s most recent manufacturing survey hitting the highest level since June 2022. Back then, the Consumer Price Index surged to an annual increase of 9%. The chart below overlays the prices paid component (blue line) with CPI (red line).

While short covering and positive seasonals could help push the rally further over the near-term, the outlook for rising inflation poses a serious risk to the rate outlook and market valuations. There are still sectors and industries showing relative strength, which is where we want to focus our attention for new trades. Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

Today’s update will cover:

• The long-term risk from commodity prices.

• The near-term opportunity brewing in stocks.

• The market’s similarities to 2022’s bear market.

• Why the traditio…

Read more

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Now for this week’s issue…

Uncertainty is running high around the war with Iran and if peace talks to end the conflict are even in sight. That’s leading a historic run of losses across both equity and debt markets.

While President Trump and multiple reports point to dialogue between the U.S. and Iran over the past week, Iran has mostly denied any interest in bringing the war to an end.

The ongoing tensions means that tanker traffic through the Strait of Hormuz remains limited, which continues placing strains on global energy markets along with uncertainty over access to fertilizer products for farming.

That’s weighing on the S&P 500, which has now closed out five consecutive weeks with a loss. That’s the longest streak of losses since the bear market in 2022, which also occurred alongside an energy crisis following Russia’s invasion of Ukraine.

While the situation in the Middle East is weighing on investor sentiment, the action in interest rates on both the short- and long-end of the yield curve is emerging as a key catalyst behind the drawdown in stock prices.

The outlook for rate cuts by the Federal Reserve is in jeopardy, while long-term rates are jumping higher as well due to uncertainty around inflation. The 30-year Treasury yield is close to breaking higher from an ominous pattern that could mean sharply higher rates ahead.

Sectors and themes with expensive valuations are particularly vulnerable to rising inflation and the rate outlook. After serving as the foundation for the bull market rally coming out of 2022’s bear market, the “Magnificent 7” are now leading the way lower and are down over 15% year-to-date.

This week, let’s look at the various catalysts threatening the outlook for higher interest rates and what that means for the stock market and artificial intelligence trade. We’ll also look at the rally in commodity prices, and why commodities could be in the early stages of a multi-year bull run.

The Chart Report

The war in the Middle East is creating a cascading impact on numerous markets through direct and indirect channels. The most direct impact is on energy prices including oil and natural gas. The growing risk of lasting damage on the global economy from high energy prices is pressuring the stocks market. But perhaps the most consequential spillover impact is on the outlook for inflation, and implications for interest rates on both the short- and long-end of the yield curve. Short-term rates are quickly rising as the market starts entertaining the thought of rate hikes, while the threat of rising inflation is causing longer-dated yields to rise as well. That’s sending the overall Treasury market to one of its worst months in the past five years (chart below).

In addition to the prospect for rising inflation to place upward pressure on interest rates, a wall of investment grade debt issuance is facing investors over the next 12 months. That includes $10 trillion of U.S. government debt that matures and needs refinanced (much of it from the pandemic era issued at much lower interest rates) and represents around a third of all Treasury debt outstanding (dark blue line in the chart below). At the same time, new borrowings totaling $4 trillion from government and corporate issuers are expected over the coming year, which means there is approximately $14 trillion in investment grade supply coming to market.

The combination of rising inflation and massive supply of investment grade debt coming to market is major threat to interest rates. The 30-year Treasury yield is already trading in a pattern that could point to a looming breakout in longer-dated rates. The chart below shows the 30-year Treasury yield, which is trading in a multi-year ascending triangle pattern with resistance at the 5.0% level (chart below). The 30-year is close to a major breakout over that level, which would put the 30-year at the highest level since 2007. Rising rates would challenge investors through a couple key avenues. Higher rates (and inflation) pressure stock market valuations, while rising rates also means falling bond prices. The combination of falling stock and bond prices hit retirement portfolios during 2022’s bear market.

The impact on valuations from rising inflation and uncertainty over the economic outlook pushed the S&P 500 to its fifth consecutive weekly loss, with the index now down 7% on the year. A key feature behind the decline is that former leaders have now become the market’s laggards. The “Magnificent 7” are all linked to the artificial intelligence (AI) trade in some way, and did much of the heavy lifting during the bull market that started alongside ChatGPT’s introduction in late 2022. But a combination of elevated valuations and questions around the sustainability of capex spending (and resulting debt issuance) is weighing on Mag 7 stock prices. The chart below shows that the Mag 7 is now down over 15% this year while the S&P 500 excluding the Mag 7 is down less than 5%.

While the sheer weight of the Mag 7 is dragging major indexes like the S&P 500 and Nasdaq lower, late-cycle sectors are experiencing strong rallies. That includes equities across energy-related sectors along with commodities. Commodities were already seeing a boost in recent years following the rally in precious metals followed by copper. The rally in commodities continues broadening, with oil prices driving the the most recent uptrend phase. But commodities could still be in the early stages of a multi-year bull market. The chart below plots a ratio of the commodity prices to the S&P 500. The ratio was pushed to historically low levels during the start of this decade and has only started to inflect higher. Past episodes of a depressed ratio led to sharp mean reversion with commodities outperforming stocks over a period lasting years.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• The key chart driving the S&P 500.

• A crossover investors don’t want to see.

• One trade setup that checks all the boxes.

• Watch this breadth ratio if the rally has legs.

• Choppy price action is here to stay in the months ahead.

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Trade Idea

Karman Holdings (KRMN)

Karman peaked near $120 in January and started a new basing process. Following a drop into mid-February, KRMN rallied back toward resistance and is making a smaller pullback that’s resetting the MACD. I’m watching for a move over $110.

Key Upcoming Data

Economic Reports

Earnings Reports

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Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.

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Stock Market Update

Stocks are attempting to bounce back from an extremely oversold condition, but one key hurdle remains in the way. Across the major exchanges, the percent of stocks trading above their 20-day moving average (MA) dropped to just 18% at one point last week. Along with other indicators like the McClellan Oscillator, various breadth metrics pointed to oversold levels while investor sentiment turned increasingly bearish across both survey and positioning indicators. Those are ideal conditions to support a rally, with the S&P 500 rebounding off last week’s lows at the 6500 level. But so far, the index is struggling to recapture the 200-day MA (green line in the chart below) which has served as resistance on several occasions this week.

While breadth, sentiment, and positive seasonality over the coming month are all tailwinds for equities, investors are being forced to contend with a rapidly changing dynamic when it comes to monetary policy. As forces driving inflation show no signs of easing, the outlook for rate cuts is growing uncertain as various market-based indicators are now pointing to the prospect of rate hikes in the year ahead. The 2-year Treasury yield now sits above the upper bound of the fed funds target, and fed fund futures now favors a hike in 2026. At the same time, longer-dated yields are approaching key levels. The chart below shows the 30-year Treasury yield, which is forming an ascending triangle pattern. A breakout would put the 30-year at the highest level in nearly 20 years.

The interest rate backdrop is quickly shifting to a headwind on both the short- and long-end of the yield curve. While that could pressure equity prices, I believe the near-term setup favors bullish action in the indexes. With that in mind, it’s important to keep a close watch on our trade setups that are showing relative strength and nearing key breakouts. Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

Today’s update will cover:

• The key chart driving the S&P 500.

• A crossover investors don’t want to see.

• One trade setup that checks all the boxes.

• Watch this breadth ratio if the r…

Read more

If you find this report helpful please hit that “like” button, share this post, and become a subscriber if you haven’t already done so!

🚨And be sure to check out Mosaic Traders Hub. It’s a members-only platform to alert trade ideas, track a model portfolio of open positions, and further analyze the message coming from the capital markets.

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Now for this week’s issue…

As the war in the Middle East drags on, spillover effects are being felt across various segments of the capital markets which is threatening catalysts behind the bull market.

Oil prices are hovering near their highs following the outbreak of the conflict and closed the week trading at nearly $98 per barrel. Other distortions are being felt in energy markets around the world, especially following Iran’s attack on the largest liquified natural gas facility in the world.

The prospect of a sustained increase in energy prices is being felt at a time when inflation is already inflecting higher. The latest headline Producer Price Index (PPI) jumped by 3.4% in February compared to last year while the core figure that excludes food and energy prices increased by 3.9%.

PPI inflation will often lead changes in consumer inflation measures, with inflation reports not yet reflecting the breakout of war in the Middle East and ensuing impact on energy prices.

At the same time, the Federal Reserve elected to keep interest rates steady at a range of 3.50-3.75% at their meeting last week, while also increasing forecasts for inflation. Fed chair Jerome Powell acknowledged the economic impact of the war on Iran is uncertain while also reiterating the Fed’s long-term inflation target is 2%.

But the problem is that the Fed’s preferred inflation gauge hasn’t been below 2% since February 2021, with the threat that inflation could inflect sharply higher in the months ahead. As a result, market-implied odds aren’t pointing to another rate cut until September 2027 (chart below).

The outlook for monetary policy is quickly turning bearish for equity markets, with one key leading indicator for rates crossing a threshold pointing to tighter policy ahead.

This week, let’s look at the link between surging oil prices and recessions, along with the massive shift in the outlook for monetary policy that’s underway. While challenges to the market outlook are growing, conditions favor a short-term rally for the S&P 500.

The Chart Report

Developments in the Middle East continue unfolding at a quick and unpredictable pace. Shortly following the stock market close on Friday, President Trump posted that the military operation against Iran could soon wind down. That was followed by threats to take out Iran’s power generation facilities if it didn’t reopen the Strait of Hormuz. Iran threatened to respond by targeting energy infrastructure across the region. That’s keeping upside pressure on oil prices, which is recently crossing a key threshold historically associated with recession. Oil prices have jumped 50% above trend, which has been seen before or during nearly every recession over the past 50 years (chart below).

Oil prices are directly correlated to headline inflation, where a $10 increase per barrel can push inflation higher by 0.20% or more. And even before the outbreak of conflict in the Middle East, there are growing signs that inflation is already inflecting higher. Core PPI, which tends to lead consumer inflation, jumped to 3.9% in February while the Fed’s preferred core PCE inflation gauge gained 3.1% in January and was the highest level in over two years. With inflation already accelerating and set to receive another boost from energy prices, the inflation cycle from the 1970s continues tracking closely. The chart below overlays the 1970s cycle (blue line) with CPI inflation (red line), along with 1-year inflation breakeven rates (dashed brown line). If this cycle continues tracking, then consumer inflation could be starting another wave higher following the wave into mid-2022.

Despite recent weakening in labor market data, the Fed is executing a hawkish shift in policy stance toward the inflation outlook. That move was already underway before hostilities broke out in the Middle East, which is injecting yet more uncertainty into the outlook for inflation. As a result, the market is quickly repricing the outlook for rate cuts. While market-implied odds don’t point to another rate cut for over a year, another key indicator is suggesting that rate hikes could be in store. The 2-year Treasury yield historically leads changes in the fed funds rate. For the first time since 2023, the 2-year yield is crossing above the upper bound of the current fed funds target. If the move is sustained, the bond market is cautioning that rate hikes by the Fed are becoming more likely.

Equity markets are experiencing a sharp pullback with the S&P 500 down as much as 7% from its peak. While the uncertainty over inflation and the outlook for monetary are broadly weighing across the market, conditions are very favorable to see at least a short-term rally unfold. Various measures of investor sentiment and positioning are pointing to excessive bearishness in the market while breadth metrics are extending to extremely oversold levels. The chart below shows the percent of stocks across major exchanges trading above their 20-day moving average (MA). At just 18%, the figure hit the lowest level since the selloff around the trade war about a year ago, with readings below 20% pointing to extremely oversold conditions.

Conditions across breadth and sentiment are evolving to support a rally in the S&P 500. At the same time, historic precedent for market movements around major geopolitical events also hint that a rebound could be in store for the stock market. The chart below plots how the S&P 500 traded on average (purple line) before and after 30 major geopolitical events since 1939. If the S&P continues tracking the previous cycle on average (blue line), then the market could be in close proximity to a significant low heading into next week.

Heard in the Hub

The Traders Hub features live trade alerts, market update videos, and other educational content for members.

Here’s a quick recap of recent alerts, market updates, and educational posts:

• Breadth and seasonality aligning for a rally.

• The S&P 500’s path during past geopolitical events.

• The key ingredient that could boost the stock market.

• Why PCE inflation is going to give the Fed nightmares.

• Data center infrastructure stocks keep showing relative strength.

You can follow everything we’re trading and tracking by becoming a member of the Traders Hub.

By becoming a member, you will unlock all market updates and trade alerts reserved exclusively for members.

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Trade Idea

Nebius Group (NBIS)

AI infrastructure stock that rallied to the $140 level in October and is forming a new basing pattern. A recent test of resistance follows a couple smaller pullbacks off the $80 support level. I’m watching for a move over $140.

Key Upcoming Data

Economic Reports

Earnings Reports

I hope you’ve enjoyed The Market Mosaic, and please share this report with your family, friends, coworkers…or anyone that would benefit from an objective look at the stock market.

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Become a member of the Traders Hub to unlock access to:

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Come join us over at the Hub as we seek to capitalize on stocks and ETFs that are breaking out!

Subscribe now

And if you have any questions or feedback, feel free to shoot me an email at mosaicassetco@gmail.com

Disclaimer: these are not recommendations and just my thoughts and opinions…do your own due diligence! I may hold a position in the securities mentioned in this report.

These ideas are the end result of my process to identify stocks offering the right combination of growth fundamentals along with a proper chart setup. Live alerts are sent to Traders Hub members only.

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Stock Market Update

A big problem is brewing for the Federal Reserve. The same day that the Fed concluded its latest rate-setting meeting and voted to keep rates steady, the Producer Price Index (PPI) for the month of February gained more than expected. The headline PPI jumped by 3.4% compared to last year while the core figure that excludes food and energy prices increased by 3.9%. PPI inflation will often lead changes in consumer inflation measures, with inflation reports not yet reflecting the breakout of war in the Middle East and ensuing impact on energy prices.

During his post-meeting press conference, Fed chair Jerome Powell acknowledged the economic impact of the war on Iran is uncertain while also reiterating the Fed’s long-term inflation target is 2%. But the Fed’s preferred measure of consumer inflation (the PCE price index) hasn’t been below that level since February 2021 (chart below) while the central bank’s updated economic projections shows the median forecast for PCE inflation rising to 2.7% in 2026 versus 2.4% in the prior estimate. As I’ve outlined frequently, leading indicators of inflation and inflation-sensitive sectors are warning of higher price levels ahead, and that was before the jump in energy prices.

Not surprisingly, the S&P 500 has moved into a regime of strong negative correlation to oil prices. The longer the conflict in the Middle East drags on, the more upside pressure on oil prices and impact on the outlook for monetary policy. Traffic through the Strait of Hormuz remains at a standstill (chart below), which is impacting energy and fertilizer supplies. While stocks could still rally in the near-term from an oversold condition, the longer-term outlook is facing serious challenges from inflation and the interest rate outlook.

For our model portfolio, we continue trimming open positions hitting trailing stops while focusing new exposure on industries showing relative strength, including one one new addition this week. Keep reading to see:

• Open ETF positions.

• Open stock positions.

• Chart analysis for new trade ideas.

Read more

I wanted to share a newsletter we’ve been following: Money Machine Newsletter.

It’s designed to help you become a smarter, independent investor with two things:

1. Market-beating stocks in a 5-min read. Picked by elite traders. Delivered weekly to your inbox pre-market.

2. Market, investing, and business insights from insiders and experts outside the mainstream media.

You won’t find the same watered down stock picks like other services. Nor will you find the same regurgitated mainstream media information here.

Money Machine Newsletter

Market-beating stocks in a 5-min read. Picked by elite traders. Delivered weekly to your inbox pre-market.

I’ll let Money Machine Newsletter take it from here…

This week’s market, investing, and business insights from insiders and experts outside the mainstream media:

1. A 300-year-old monopoly just got a wake-up call.

2. A legacy utility just became the most important backbone in AI.

3. GPT-5.4 arrives, OpenAI just leveled up again.

4. THIS company is burning cash to buy your mortgage rate.

And more. Let’s get to it!

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Top Insights of the Week

1. The world saw a crisis. The U.S. saw a market.

• When the Strait of Hormuz gets wobbly, the world holds its breath. And right now, it’s not breathing…

  • After U.S. and Israeli strikes on Iran, insurance consortiums voided existing war risk policies overnight. The London market’s Joint War Committee expanded the official war zone to cover the entire Persian Gulf. P&I clubs — the mutual insurers that backstop global shipping — announced existing coverage would lapse, requiring entirely new policies for any vessel entering the region. Premiums spiked from 0.25% of a ship’s hull value to 1% — and in some cases as high as 3%. For a $100 million supertanker, that’s a jump from $250,000 to $2–3 million per voyage.

  • If a shipping company can’t get insurance, their lenders won’t let the boats sail. Simple as that.

• Tanker traffic through the Strait dropped 94% — from 50 transits on February 28 to just 3 on March 1. Oil surged to $84 a barrel. This is how inflation starts…

  • Now, the Strait normally moves about 20 million barrels of oil a day — roughly 20% of global consumption. That flow didn’t just slow down. It stopped. And every day it stays stopped, production across the Gulf backs up. JPMorgan estimates that by eight days of closure, forced production shutdowns could reach 3.3 million barrels per day. Meanwhile, pipeline alternatives through Saudi Arabia and the UAE can only reroute 2.6 to 4.2 million barrels — nowhere near enough.

• Most people saw a crisis. Trump saw a market…

  • The U.S. stepped in. The International Development Finance Corporation announced a $20 billion reinsurance facility for Gulf shipping — hull, machinery, cargo — backed by the U.S. government in coordination with CENTCOM. If the risk is too hot for the private market to price, Washington will backstop it.​

• Here’s where it gets interesting…

  • Lloyd’s of London has dominated maritime insurance for over 300 years. And to be fair, Lloyd’s didn’t fully walk away — the Lloyd’s Market Association confirmed on March 5 that it is still quoting war risk insurance and that coverage “currently remains in place” for most vessels in Gulf waters. But it doesn’t matter. The DFC already identified “best-in-class, preferred American insurance partners”. The U.S. government is building the infrastructure to route this business through American firms.

  • This matters beyond oil. About 90% of Iran’s crude exports go to China. Controlling who insures the ships that carry the world’s energy gives you leverage over everyone who depends on it.​

  • Whether this becomes a permanent reshoring of maritime insurance or just a wartime emergency measure is the real question. Lloyd’s has survived centuries of wars and isn’t going quietly — they’re already in talks with the DFC about a joint public-private arrangement. But the precedent is set. The U.S. government has proven it can step into the insurance game at scale.​ We’re not just protecting ships. We’re staking a claim on the industry.

2. 52-year-old dividend stock running tomorrow’s AI

• Everyone is talking about AI chips. Nobody is talking about the plug. You can’t run a supercomputer on good intentions. You need electricity. Massive, non-stop power. The current grid is tapped out. Renewables are too inconsistent, and nuclear takes a decade to approve. The only scalable fix right now? Natural gas. Enter Williams Companies (WMB)…

  • They already move a third of all natural gas in the US. They own the pipes. But now, they’re cutting out the middleman.

  • Instead of just shipping gas, they’re building power plants directly on-site for tech giants. When a massive data center needs power today, Williams routes a pipe right to them, builds a plant next door, and locks in a long-term contract.

  • They’ve committed $5.1 billion to these direct-to-customer projects, with a backlog expected to hit 6 gigawatts by 2030. It’s an entirely new, highly profitable monopoly.

• The numbers (Q4 2025)...

  • Market Cap: ~$91B

  • Forward P/E: ~34x

  • 2025 Revenue: $11.83B

  • Adjusted EBITDA: $7.75B (targeting $8.20B in 2026)

  • Dividend Yield: 2.8% (raised for the 52nd consecutive year)

  • 52-week high: $76.87

  • 52-week low: $51.58

• The risks…

  • It’s expensive. Building plants costs real money. 2026 capital expenditures will top $6 billion.

  • It requires debt. They run at a 4.0x leverage ratio. If interest rates stay sticky, carrying that debt hurts.

  • It’s regulated. Laying pipe and building plants always means fighting through environmental and political red tape.

• Bottom line… Wall Street sees a boring, legacy pipeline. We see the physical backbone making the AI boom possible. Become a premium subscriber and get alerted when this stock triggers our setup for entry point, target price, and stop loss.

Top 3 Charts of the Week

1. GPT-5.4 arrives, OpenAI just leveled up again

• OpenAI released GPT-5.4. It’s their smartest tool yet, scoring 83.3% on a big logic test. It’s faster, handles bigger tasks, and even uses your computer for you. It solves harder problems, though it costs more—up to $180 for 1 million tokens.

2. Opendoor bets on 4.99% mortgages while its own profits take a hit

• Opendoor is offering 4.99% mortgages by cutting out middlemen. They’re losing money elsewhere—net losses hit $1.3 billion—so they’re trying something new to sell houses faster.

• They’re using automation to lower rates below the 5.98% average. It’s a gamble to fix their shrinking profit, which dropped from $13,500 to just $3,500 per home.

• Buying a house might get cheaper, but the company providing the loan is struggling. If their “new math” doesn’t work, this deal won’t last forever.

3. 1 in 5 California home transfers are now inheritances

• In California, 17.5% of home moves are now inheritances. That’s double the national average and twice what it was thirty years ago.

• Buying a house is so expensive that people just wait for their parents’ homes. Low taxes keep families staying put for 20 years. The “California Dream” is changing. Unless you’re born into a house, getting one is harder than ever. It’s a closed loop.

Join 6,000+ self-directed investors who have already placed themselves on the path to greater wealth—potentially making $500, $1,000, $2,000, $3,000, or more every month with Money Machine Newsletter’s trade ideas.

Money Machine Newsletter

Market-beating stocks in a 5-min read. Picked by elite traders. Delivered every Monday to your inbox before the market opens.

See you in there!

Best,
Money Machine Newsletter

Nothing in this email is intended to serve as financial advice. Do your own research.

Today’s update will cover:

• Breadth and seasonality aligning for a rally.

• The S&P 500’s path during past geopolitical events.

• The key ingredient that could boost the stock market.

• …

Read more

If you find this report helpful please hit that “like” button, share this post, and become a subscriber if you haven’t already done so!

🚨And be sure to check out Mosaic Traders Hub. It’s a members-only platform to alert trade ideas, track a model portfolio of open positions, and further analyze the message coming from the capital markets.

Subscribe now

Now for this week’s issue…

The outlook for the S&P 500 is coming down to one factor: the duration of the conflict in the Middle East and impact on oil prices.

Oil prices spiked to nearly $120 per barrel and remain near $100 as oil faces the biggest disruption ever (chart below). That’s impacting the outlook for economic activity, inflation, and ultimately monetary policy.

Market-implied odds for interest rate cuts by the Federal Reserve are being pared back over fears of inflationary pressures from the war against Iran. Oil and natural gas prices are holding their gains, while food prices could be impacted by fertilizer shortages since the Middle East accounts for as much as 50% of key fertilizer ingredients.

Although investor fears are shifting to the inflation outlook and prospect for rate hikes, the labor market is showing signs of stalling following the February payrolls report showing a loss of 92,000 jobs during the month.

Betting markets are showing a rising chance of recession in 2026 as a stalling labor market is colliding with fears that rising inflation will limit any accommodation from monetary policy.

Those stagflation concerns are weighing on the major indexes, with the S&P 500 putting in its third consecutive weekly decline and trading at the lowest level in four months.

But the pullback is creating extremely oversold breadth conditions across the market while bearish sentiment spikes higher. Any signs of easing tensions in the Middle East could spark a massive reversal higher given the technical backdrop.

This week, let’s look at why the conflict in the Middle East could drive a sharp rise in food inflation and cloud the outlook for monetary policy. We’ll also look at signs that the selloff in the stock market has gone too far, with several conditions aligning to spark a rally.

The Chart Report

The conflict in the Middle East could place upward pressure on inflation via multiple transmission channels. Most focus is being placed on the surge in oil prices, where every $10 per barrel increase can add 0.2% to headline inflation. Oil prices spiked to their highest level since 2022, back when an inflation wave took the Consumer Price Index as high as 9%. Food prices could become another key contributor to inflation since the Middle East is a critical producer of farm fertilizers. In addition to being a key oil conduit, the Strait of Hormuz sees about one-third of the world’s fertilizer ingredients transit through. The chart below overlays an index of food prices (red line) against oil prices (black line) where the two series tends to be very positively correlated.

Key fertilizer ingredients are being impacted near the start of the U.S. spring planting season. One estimate suggests that the U.S. could face a 25% shortfall of key fertilizer products, where it relies heavily on imports. A shortage of fertilizer could drive prices higher and place upward pressure on food prices, or could push crop yields lower and result in shortages. One way to track and trade a rally in food prices is with the Invesco DB Agriculture Fund (DBA) in the chart below. DBA made a recent peak in early 2025 and is making lower highs since then while finding price support around the $25 level. Price is back near trendline resistance off the 2025 high, where a breakout could point to higher prices for agricultural products.

The labor market is showing signs of stalling since the start of 2025, with payrolls averaging just 10,000 jobs per month. With the Federal Reserve expressing concerns over the health of the labor market last year, that seemed to open the door for more rate cuts in 2026. But the conflict in the Middle East is promising to stoke inflation, while more recently the Fed is making a hawkish pivot due to the lack of progress in bringing inflation lower. Market-implied odds point to just one rate cut this year and not until the December meeting. A lack of accommodation from monetary policy to support the labor market coupled with the impact of high energy prices on inflation and consumer spending is causing recession odds to spike. The chart below shows odds of a U.S. recession in 2026 currently stands at 30% and spiked higher following the outbreak of war in the Middle East.

The conflict in the Middle East threatens the stock market through two primary catalysts. One is with inflation, where higher levels of inflation are associated with lower valuation multiples on average. The negative impact on the economy also threatens the earnings outlook. The S&P 500 has seen consecutive losses for three weeks in a row, while the average stock is also pulling back sharply following a strong start to the year. But the broad selloff is seeing measures of breadth hit extremely oversold levels. The chart below plots a composite of breadth metrics and is hitting oversold levels last seen during the stock market plunge following last year’s trade war.

Several measures of market breadth and investor sentiment are hitting levels that could spark a bullish reversal in the stock market. At the same time, the S&P 500 is coming up to a positive stretch of seasonality that tends to see the market make a low for the year in mid-March and rally into the end of April. The historical path of the S&P 500 around geopolitical conflict is also reaching a key inflection point. The chart below shows how the S&P traded before and after several major geopolitical conflicts. If the S&P is going to follow a similar path, then the market should be nearing a key inflection point. With breadth extremely oversold, investor bearishness on the rise, and stock market seasonals becoming more positive, the conditions are present to see a rally unfold.

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Trade Idea

Solaris Energy Infrastructure (SEI)

The stock is trading in a sideways range since October with price action recently firming up. SEI is making a smaller pullback off resistance at the $60 level. I want to see the MACD cross above zero and make a bullish reset before breaking out.

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