VIDEO: During Trump 1.0, equities bottomed when VIX surged and sentiment flipped negative. Took months in 2018 but only weeks in 2025
Please click below to view our Macro Minute (duration: 7:30).
Stocks have been rallying for two weeks, and while this strength may be difficult for many investors to reconcile amid prevailing skepticism, we believe equities bottomed on March 13th following a 10% drawdown. Many market participants remain cautious ahead of April 2nd, which marks Tariff Liberation Day, yet we view current market action as a repeat of the setup from 2018 during the first wave of tariffs under Trump’s administration.
- In 2018, equities bottomed on February 19th after a sharp 12% drop that was triggered by President Trump’s comments on tariffs at Davos on January 26th.
– Despite ongoing volatility, the S&P 500 established support above the 200-day moving average, successfully testing that level three times.
– Importantly, the VIX spiked to 50 on February 18th, coinciding with the market bottom.
– A secondary VIX peak of 26 occurred on April 2nd when tariffs were enacted, but fear had already receded. - Sentiment measures further supported the idea that markets found footing before the crowd caught on:
– The AAII Bull-Bear spread showed investors remained bullish until mid-April—well after the February bottom.
– Similarly, the University of Michigan’s two-month change in equity sentiment reached a low on March 31st, confirming that pessimism lagged the market turn. - Fast-forward to 2025, and a similar pattern appears to be unfolding.
– The S&P 500 is seeing support around the 200-day moving average once again.
– The VIX peaked at 28 on March 10th, and sentiment deterioration has been far swifter this time.
– AAII bulls have plunged to -40 in just three weeks, versus a three-month decline in 2018.
– Moreover, the Conference Board’s stock sentiment flagged a two-month drop of -17 in March, reinforcing that sentiment has already reset. - If the 2018 comparison holds, equities could be poised for sustained upside.
– In that earlier cycle, once the cluster of fear and bearish sentiment formed, stocks advanced 15% over the next several months.
– We believe that we are now in that same setup, with the current rally supported by negative sentiment and technical resilience.
– This may evolve into a V-shaped recovery—a “face ripper”—especially after April 2nd. - Broader global performance and policy expectations further bolster the bull case.
– International equity markets are outperforming U.S. stocks, possibly signaling optimism around tariff negotiations or global reflation.
– Meanwhile, the prospect of 2025 tax cuts echoes the pro-growth environment of 2017, adding fuel to the risk-on narrative.
– Keep in mind that there is $850 billion in incremental cash still on the sidelines and margin debt continues to contract, both of which serve as tailwinds for equities. - TSLA -3.99% remains emblematic of broader policy dynamics and equity upside.
– The stock has faced pressure amid calls for Elon Musk to return his focus to the company. We characterize this as a “White House put,” arguing that political interests may align with a rebound in Tesla.
– If TSLA -3.99% reclaims the $330 level, it could retest all-time highs. - Tomorrow brings important macro data, including Core PCE and the University of Michigan inflation expectations.
– Consensus is currently at 0.31% for Core PCE, but even a modestly hot print would leave the year-over-year inflation rate under 3%.
Bottom Line: Stay on target.






















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Key incoming data March:
3/3 9:45 AM ET: Feb F S&P Global Manufacturing PMITame3/3 10:00 AM ET: Feb ISM Manufacturing PMITame3/5 9:45 AM ET: Feb F S&P Global Services PMITame3/5 10:00 AM ET: Feb ISM Services PMITame3/5 10:00 AM ET: Jan F Durable Goods OrdersTame3/5 2:00 PM ET: Mar Fed Releases Beige BookTame3/6 8:30 AM ET: 4Q F Non-Farm ProductivityTame3/6 8:30 AM ET: Jan Trade BalanceTame3/6 8:30 AM ET: 4Q F Unit Labor CostsTame3/7 8:30 AM ET: Feb Non-Farm PayrollsTame3/7 9:00 AM ET: Feb F Manheim Used Vehicle indexTame3/10 11:00 AM ET: Feb NY Fed 1yr Inf ExpTame3/11 6:00 AM ET: Feb Small Business Optimism SurveyTame3/11 10:00 AM ET: Jan JOLTS Job OpeningsTame3/12 8:30 AM ET: Feb CPITame3/13 8:30 AM ET: Feb PPITame3/14 10:00 AM ET: Mar P U. Mich. Sentiment and Inflation ExpectationHot3/17 8:30 AM ET: Feb Retail Sales DataTame3/17 8:30 AM ET: Mar Empire Manufacturing SurveyTame3/17 10:00 AM ET: Mar NAHB Housing Market IndexTame3/19 9:00 AM ET: Mar M Manheim Used Vehicle indexTame3/19 2:00 PM ET: Mar FOMC DecisionDovish3/19 4:00 PM ET: Jan Net TIC FlowsTame3/20 8:30 AM ET: Mar Philly Fed Business OutlookTame3/20 10:00 AM ET: Feb Existing Home SalesTame3/24 8:30 AM ET: Feb Chicago Fed Nat Activity IndexTame3/24 9:45 AM ET: Mar P S&P Global Manufacturing PMITame3/24 9:45 AM ET: Mar P S&P Global Services PMITame3/25 9:00 AM ET: Jan S&P CoreLogic CS home priceTame3/25 10:00 AM ET: Mar Conference Board Consumer ConfidenceTame3/25 10:00 AM ET: Feb New Home SalesTame3/26 10:00 AM ET: Feb p Durable Goods OrdersTame3/27 8:30 AM ET: 4Q T GDPTame- 3/28 8:30 AM ET: Feb PCE Deflator
- 3/28 10:00 AM ET: Mar F U. Mich. Sentiment and Inflation Expectation
- 3/31 10:30 AM ET: Mar Dallas Fed Manuf. Activity Survey
Economic Data Performance Tracker 2025:

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Economic Data Performance Tracker 2023:
