Was Last Week's Rally Just Another Mirage?

I was pretty busy last week watching everything from Oil/Energy to Tech — and of course doing a deep dive on the $VIX. I wrote what I'd call the best piece in 15 years of blogging, after confirming through AI that the market actually is rigged. It really takes more than one read to fully absorb, and you can find it permanently linked in the side menu: They Can't Short the VIX. Here's How They Do It Anyway — A Deep Dive into the Most Manipulated Indicator on Wall Street — and the Proof Is Right There in the Charts.

Speaking of manipulation, there's been a lot of chatter about Trump closing the Strait of Hormuz to help spur U.S. energy production. The latest headline says it all:

Trump invokes Defense Production Act to boost energy supply amid Iran war (chinadaily.com)

"Trump invoked the Defense Production Act to provide federal funds for a wide range of energy projects, 'as his administration faces pressure to help curb rising oil, gasoline and electricity costs,' Bloomberg reported."

That tells me the Strait is going to stay closed indefinitely — or until Europe grows a pair. Of course, the globalists must be furious that Trump is ramping up production of dirty crude out of Venezuela, and even coal.

Some folks think he's manipulating markets specifically to swing trade them.

The confusing noise surrounding the Strait may be triggering the algos, but Trump isn't a swing trader. That said, are some folks in the administration getting a leg up on the news-triggered algos? Perhaps. We saw the Dow rally several hundred points and Oil crash ahead of Monday's opening bell — as news broke that "the strait is open" — but markets were already poised to rally into April Options Expiration anyway.

Gerald Celente and Judge Napolitano are "100%" certain Trump is continually telegraphing an end to the war to juice equities. Maybe.

But here's the bigger truth worth sitting with: the stock market may not be the best indicator of the economy.

One of the biggest snapback rallies I've ever seen was the short squeeze in Financials during the crash of '08 — the $KRE chart below tells that story. Markets can rip violently higher on short squeezes even as the foundation crumbles beneath them.

$KRE Massive Short Squeeze in the Regional Banks '08

Today, Tech is leading markets precisely because the banking system never fully recovered and the economy remains on life support. Real-Estate? Still in a massive bubble. The playbook keeps repeating: Covid crash? Buy tech. Strait of Hormuz shut? Pile into tech. Money has to go somewhere.

The German $DAX is another shining example of markets rallying irrationally — as it rallied to new all-time highs straight through the last recession. Was that just setting up a harder take down when the inevitable correction arrives? In other words: Are the globalist elites pumping global equities because they know this is the market's last hurrah, before a financial reset? Add to that the threat of food shortages. Is this part of the plan? It wouldn't surprise me, if we're being set up for the fall.

Was Last Week's Rally Just Another Mirage?

Yesterday's stall was entirely predictable — if you read Sunday's post, you already know why [link].

This Market Phenomenon is what's been commonly referred to in the past - by the Late Great Art Cashin & others - as a Monday Morning Hangover. Because The market partied too hard on Friday, and if you read the article I published on Sunday - you already know why the $SPX is sitting up on a shelf like a participation trophy.

$INDU (The Dow Jones) Resembles a H&S pattern, yet there is an upturned megaphone pattern still in play. I'll tell you one thing; if the Dow doesn't start making new highs Joe Sixpack isn't about to start chasing AI bubbles, in order to get back to even. Looks like it's redemption time. Consider that a warning to ring the register.   

$TRAN is absolutely on fire - up another 4% yesterday. According to Grok/AI  "Markets have been pricing in de-escalation (post-ceasefire signals and expectations of normalized shipping traffic), triggering a broad risk-on move and algo buying." I find that explanation sorely lacking. In fact I only wish there were an easy way to short the hell out of it! 🎆 

Reminder: 3 months ago AI was going to kill the trucking industry –remember the karaoke machine story? But today everything is back to normal, with the Strait of Hormuz situation still simmering? CUT THE BULL! I suspect, there must be high short interest somewhere, and the bulls are playing their usual game of cat and mouse.

Was Last Weeks Rally Just Another Mirage?   

📢High Beta is still ripping +1% on “Iran deal hopes”. $VIX well off the highs while $SPX sits there like a participation trophy doing absolutely nothing. I took a nap. Win/Win. 🤣#WinWin #Stocks #IranDeal

— Veteran Market Timer (@3Xtraders) April 20, 2026

If you had told me years ago that the market would be trading at all time highs, and the Strait of Hormuz closed, and Oil prices spiking, and Gold trading near $5000, and I'd be taking morning naps, I would've laughed! 🤣 To be honest I was up at 1:30 AM, but still...

$VEMPX (Extended Market Index Fund) continues to break out to new all time highs. As you can clearly see the final target is a hair's breadth away from the target. 

Chart 

I don’t think I need to tell you twice…

P.S. $VEMPX (Vanguard Extended Market Index Fund Institutional Plus) is a low-cost index fund that tracks the S&P Completion Index by holding a broadly diversified portfolio of roughly 3,300 mid- and small-cap U.S. stocks (excluding S&P 500 companies), representing about one-fourth of total U.S. equity market capitalization. 

   

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