Friday Chart Book

April 25, 2025

Compared to just a few weeks ago, trading days are now returning to a typical 1 or 2 volatile days, with the rest consisting of reversals and subdued intra-day volatility. Are the good times back? Not so fast. We just went through a thunderstorm, so naturally, leaving the eye feels like relative calm. Needless to rehash that most of this calm came from the maker of the storms themselves. Trump’s walkback from firing Powell, as well as softening his stance on Chinese tariffs, revealed two things to markets.

1. There is both an implicit Bond and Equity put in the White House. Be it through Bessent or Trump himself, someone had to learn the effects of unintended consequences while trying not to shoot themselves in the foot.

2. Following on from the first point reveals that the panicked narratives of the US losing its reserve currency status or even defaulting on its debt due to refinancing difficulty have been buried. Tail risks have been mitigated for now.

In this week’s Mid-Week Update, I wrote the following:

“Narratives are what drive markets these days. There are plenty around. Reserve currency status, de-dollarisation, debt rollover risks, fiscal situation, tariffs, central bank independence, just to name a few. The thing about market narratives, especially when dealing with so many at the same time, is that it invites tourists to play the game. I am hearing of equity guys shorting the USD or engaging in yield curve steepening trades because that’s, well, the prevailing narrative. Typically, tourists get burned.”

And the burning didn’t have to wait too long as the reversals punished the late-comers. Subscribers were alerted to the potential of a Gold and the USD reversal, and I hope people capitalised on those signals. What comes next?

Having benefited nicely on our macro roadmap, which called for a weaker USD, lower US equities, and steeper yield curves, it’s essential to acknowledge that as markets move in line with your view, risk-reward changes, which typically triggers some profit-taking. I will revisit all those trades with full force once better levels are in sight, while entertaining more tactical trade ideas in the interim.

Meanwhile, our 2025 buy-and-hold portfolio is up nearly 6% YTD and beating the SPX comfortably after rebounding from the early April downmove.

Talking of trade ideas, Macro D published two pieces this week, which are worth considering. He is combining longer-term and short-term trading ideas, which are outlined below.

In addition, we published a piece on the current and likely future relationship between the European powerhouses France & Germany and what this would imply for investment purposes.

I believe markets are now focusing firmly on the fallout from the tariff-induced volatility and uncertainty. While soft data prints have already been deteriorating rapidly, hard data is yet to follow suit. Bonds are seemingly already sniffing out some weakness, with some Fed members turning a bit more dovish, with Hammack and Waller throwing some balanced but dovish tones just ahead of the FOMC communication blackout period. Globally, it appears that a more dovish stance has prevailed among monetary leaders, with the ECB shifting its focus as it now expects a demand shock from the turbulence.

We shall, of course, see. Forecasting economic data is immensely challenging, and it will be nearly impossible to get a good sense of where things are headed in the upcoming data release. That calls for a more nimble approach. I sense that hard data won’t deteriorate that quickly and that proper weakness, if at all, will only be visible from June onwards. In the meantime, Trump and Co. are still in charge and will surely throw us more curveballs as we move forward.

Fun times are ahead, and we will continue to take advantage of the opportunities offered to us by our momentum, reversal, and intra-day models. In addition, I will publish a few more comprehensive macro pieces, untangling the effects of trade and budget deficits and what history tells us about how these factors affect markets.

A reminder that you can now also use my models in TradingView scripts, which I made available for subscribers to use on their charts. This is not for free and incurs an additional cost.

If you are interested, ping me an email with your TV username. Note that only paying subscribers will be granted access. No exceptions.

The 20% discount on all subscriptions is still available until the end of the month. A few more days to join the pack at a discount.

Let’s now go into more detail and read what Macro D has in store for us. We then scan the multitude of charts I have updated below (as of Thursday close). 250+ charts, plenty to scan through.

Let’s go!