Tariff Shock, Stage-2 Intact: Earnings Season Test
october 10, 2025 - Update
Very quick update this week.
The market sold off after comments from President Trump about a potential extra 100% tariff on Chinese imports. It seems resolved for now. Here’s what Groks wrote:
On Friday, markets tanked—S&P 500 down 2.7%, Nasdaq -3.6%—after President Trump’s fiery threat of 100% tariffs on Chinese imports in response to Beijing’s rare earth export curbs. Fears of Trade War 2.0 erased $2T in value, hammering tech stocks. Good news: Trump dialed it back Sunday on Truth Social, calling it a “bad moment” for Xi and signaling U.S. willingness to help, not hurt, China. No meeting cancellation at APEC, and futures are pointing to a softer open Monday. Bottom line: Risk of a fresh sell-off tomorrow? Moderate and mostly priced in.
The most important data point for me: oil prices are declining and the 10-year Treasury yield is falling. Both help the Fed keep cutting rates.
We’ve seen these headline-driven swings under President Trump before. Let’s see how next week evolves.
My take: the backdrop for stocks remains positive over the medium term (3–6 months). In the very short term, anything can happen.
Earnings season is starting and expectations are solid, especially for tech. If companies beat and guide well, current valuations may be less of a problem—at least for a while.
INDEX
The SP500 lost 2.4% for the week. Below if the analysis done using AI under the Stage Analysis framework.
Weekly move
The S&P 500 lost ~2.4% for the week. Below is the Stage Analysis view.
Stage & trend
Stage 2 (Advancing) remains intact.
Price pulled back and closed ~6552, below the rising 10-week (~6650) but above the rising 20-week (~6470), 30-week (~6290), and 40-week (~6100). The primary uptrend is not broken.
Momentum & risk
RSI ~62—cooled from overbought but still in a bullish zone.
MACD is rolling over (narrowing lines, fading histogram) → likely a momentum pause and risk of multi-week consolidation. Volume looks normal.
Key levels (approx.)
Resistance: reclaim the 10-week ~6650; then ~6750–6800.
Support 1 (trend guardrail): 20-week ~6470 and shelf ~6480–6520. A weekly close below here puts the index on Stage-3 watch.
Support 2: 30-week ~6290; Support 3: 40-week ~6100 (line in the sand).
Next few weeks — likely paths
Base case: sideways to slightly lower into the 20-week (~6470), then attempt to turn up—typical Stage 2 behavior.
Bullish: quick reclaim of the 10-week and push through ~6750–6800 to resume the advance.
Caution: two weekly closes below the 20-week or a decisive break of ~6470 on rising volume likely targets ~6290 and raises Stage-3 risk.
Bottom line
Still Stage 2, digesting gains. Expect chop between ~6470 and ~6750. Holds at the 20-week are constructive. A loss of ~6470 would meaningfully worsen the risk profile.
PORTFOLIOS
10X MOMENTUM PORTFOLIO
KRYS and MU buy-stop orders triggered. I’m fully invested.
No new moves this week. Stop-loss levels are updated.
10X UNDERPRICED GROWTH PORTFOLIO
FSLR and INVZ orders triggered.
Stopped out of REAX at -22% on the first lot. I never added the second lot because price didn’t confirm—this is one way to control risk.
No other changes this week. Stops are updated.
That’s all for now. Let’s see how the week develops.
Important: This post is not investment advice. Please consult a licensed financial adviser before making any investment decision