<![CDATA[Ceasefire Cluster Developing]]>

⚑ What We Are Watching

Tuesday's ceasefire rally — stocks up strongly, oil down 18%, fear index down sharply — was one of the biggest single-day moves of this cycle. Our signal scores haven't yet fully updated to reflect it. We expect a significant cluster of new buy signals to form in the next data refresh. The question we're focused on is: precisely where does institutional money go next? Technology and Financials are leading the answer.

What Happened

On Tuesday evening, a 2-week ceasefire was announced between the US and Iran. Markets responded dramatically on Tuesday: oil fell 18% (its biggest single-day drop since 2020), stocks surged globally, and the fear index (VIX) collapsed.

Critically, this is a pause, not a resolution. The ceasefire is a 2-week negotiating framework. BNY's chief strategist noted the situation is "unlikely to return to what it was before the conflict." Nasdaq short positions are still at 91% — institutional investors are not yet convinced this is over. Our broad market signal (SPX Q Score) remains negative and has not reversed direction.

But beneath the surface, our signals had already been picking up accumulation in Technology and Financials for three to four consecutive weeks — before the ceasefire. The price move on Tuesday is confirming what the data was already pointing toward.

The Big Shifts

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Energy stocks — the trade is changing

Oil prices fell sharply on the ceasefire news, and energy company stocks have been declining for weeks already. Our signals had flagged this peak in energy equities before the ceasefire hit. The war premium that drove these stocks is now unwinding. Williams Companies (WMB) already triggered our peak/exit signal. Reduce energy equity exposure.

Volatility — the signal confirmed, reduce exposure

We flagged the risk of a volatility reversal for three consecutive weeks. On Tuesday it confirmed: the fear index (VIX) fell sharply to 20.32. The data says reduce long volatility positions. Don't hold them on the view that the war isn't truly over — the signal is the signal.

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Technology — three weeks of building momentum

Technology is now the strongest sector in our universe, with 60% of individual tech stocks showing improving momentum — the highest of any sector. This improvement started three weeks ago, before the ceasefire. XLK (the tech ETF) is showing its third consecutive week of improving scores. Key names: Microsoft and Amazon are both confirmed tactical buy setups with strong historical hit rates.

Financials — four weeks of building momentum, 9 buy setups

Financials are showing their fourth consecutive week of improving momentum. This week produced 9 tactical buy setups (TEVO signals) in financial stocks — the largest count of any sector. Like Technology, this accumulation was already building before the ceasefire catalysed the price move.

Safe havens unwinding

The defensive sectors that held up during the war — Consumer Staples, Industrials, and Materials — are now rolling over quickly. Capital is rotating out of these havens and into Technology and Financials. Reduce positions in these sectors; the defensive premium has been distributed.

The big tech names — now treat them individually

The "Magnificent Seven" is no longer moving as one. Meta flipped to positive momentum for the first time this cycle. Microsoft and Amazon are confirmed buy setups. But Alphabet has actually deteriorated significantly in momentum terms despite its share price rising. Tesla fell on a day markets celebrated the ceasefire. Nvidia reversed after just one week of improvement. Own Microsoft and Amazon; be cautious on the rest.

Strongest POSITIVE Signals This Week

Our buy signal count grew to 29 tactical setups (up from 19 last week). Here are the standouts:

Robinhood (HOOD)

Financial services · Highest historical hit rate in this report · Earnings 28 April

Target $80.53 · +15.6%

84.6% historical hit rate

Stop $56.23

Kyndryl Holdings (KD)

IT services · Highest expected value in the TEVO list · Earnings 6 May

Target $15.93 · +22.6%

75% historical hit rate

Stop $7.32

Microsoft (MSFT)

Technology · 2nd consecutive week as a buy setup

Target $397.16 · +6.7%

73% historical hit rate

Stop: Q Band reference

Amazon (AMZN)

Target $225.46 · +5.5%

74% historical hit rate

Thermo Fisher (TMO)

Health care · Dual confirmed signal · Earnings 23 April

Target $517.05 · +5.6%

Stop $447.91

Astera Labs (ALAB)

Technology · Highest expected value in the Top Q Positive list

Target $141.63 · +19.0%

Stop $83.06

Exit Signals — Act Now

Quest Diagnostics (DGX)

Health care · Most urgent — earnings in 13 days on 21 April

Downside ref $188.92

Score deteriorating · Exit now

Linde (LIN)

Materials · Peak signal confirmed · Earnings 7 May

Downside ref $475.45

Score +7.14 · Declining

Also reduce: energy ETFs (XLE, XOP, IEO) on any remaining strength. The energy equity trade has peaked — the ceasefire removes the supply premium that drove these stocks.

What to Focus on This Week

1Exit DGX immediately. Earnings are 21 April — 13 days away. The signal has peaked and the clock is ticking. This is the most time-sensitive action in this report.
2Reduce long volatility positions. The VIX reversal signal we flagged for three weeks has now confirmed. The data says reduce — regardless of your view on whether the war is truly over.
3HOOD is the standout tactical setup. 84.6% historical hit rate on target 1. The ceasefire compression of risk premiums is directly aligned with a retail financial platform like Robinhood. Earnings on 28 April create a time window.
4Technology and Financials are the rotation destination. Both sectors have been building momentum for 3–4 consecutive weeks. Use individual stock signals (Microsoft, Amazon, Kyndryl, Robinhood) rather than buying the broad ETFs, which haven't yet confirmed their own direction reversals.
5Watch for the next signal update. Tuesday's rally will generate a significant cluster of new positive signals when the scores refresh. We'll map precisely where that cluster forms — that's where the data will confirm institutional capital is repositioning.

Ceasefire Cluster Developing — Significant Number of Positive Signals. Watching for Confirmation.