It Looks Like 2022 All Over Again - Market Outlook (Ep. 24)

The stock market for the week of March 23–27, 2026, was characterized by extreme volatility, driven primarily by shifting headlines regarding the conflict in Iran, fluctuating oil prices, and fears of a long-term bear market.  Stocks surged on Monday Mar 23, with the S&P 500 rising 1.1%, the Dow up 1.4%, and the Nasdaq up 1.4% after President Trump indicated possible, though unconfirmed, peace talks with Iran, easing fears of severe supply chain disruptions.  But optimism quickly faded as Tehran denied negotiations, and reports emerged of continued attacks on energy sites, causing oil prices to rise again and stocks to fall on Thursday...

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Transcript

SPEAKER_00 0:11

Welcome to this week's edition of Market Outlook. I'm your host, Derek Taylor, also known as DT. Market Outlook is a weekly podcast where I take a look at last week in the market as well as previewing the week ahead. I will also share with you some potential options trades that I think are interesting for this week. But first, let's take a look at what were the major stories last week in the market. The stock market for the week of March 23rd through the 27th was characterized by extreme volatility, driven primarily by shifting headlines regarding the conflict in Iran, fluctuating oil prices, and fears of a long-term bear market that may be upon us. Stocks surged a little bit on Monday, March 23rd, with the SP 500 rising 1.1%, the Dow was up 1.4%, the Nasdaq was up 1.4%. All that happened after President Trump indicated possibly that the peace talks with Iran, they were going well. There was easing fears of severe supply chain disruptions as far as oil supply. And because of that optimism, Monday was a good day. But then that optimism quickly faded as Tehran denied negotiations and reports emerged of continued attacks on energy sites, causing oil prices to start to rise again and stocks to start to fall again. Concerns over high interest rates and low demand in the treasury auctions, we saw some really low demand in the five-year and the seven-year auctions. That puts additional pressure on equity markets, especially the growth-heavy sectors. So tech, especially, was very weak this past trading week. Global oil prices remained a significant concern throughout the week. We saw the CL futures climb above$100 a barrel to start the week and to end the week. Following the early week rally, the stock market continued a downward trend in the latter part of the week. The SP, it fell 1.7% on Thursday. The market had its fifth consecutive losing week. And that is the longest losing streak that the SP 500 has had in nearly four years. And we have to go back to the bear market year of 2022, which is a really ugly year. The SP 500 was down like 20% on the year. Basically, uh, if you're weren't trading back in 2022, the SP 500 made its high on January 2nd or whatever the first trading day of that year was, and it stair stepped down for like 10 months straight. And this market right now, it kind of has that 2022 feel to me. So when it comes to my trading, you know, typically with my options portfolio, I tend to be a bull. I tend to lean a little bit on the long side. I have a mixture of various strategies, but primarily I'm bullish most of the time. But right now, I'm not bullish. I'm as bearish as I've been since 2022. Most of my options trades right now, they're either neutral trades, so strangles, iron condors, or they're bearish trades. So I'm playing the market to go down. I'm putting on put debit spreads and uh put butterflies, call ratios, things like that. And I'm really light on my usual bullish kind of trades. So my go-to kind of trades would be short puts, selling puts, right? That's the bullish trade. I don't have a lot of naked short puts on in anything right now. And until this market signals that the fear and uncertainty is over, I'm playing what I see in this market and not what I hope to see. So let's jump into the charts and see what the major market indices did last week. So let's start with the SPX, the SP 500 index. If I zoom in here and take a look at close of the previous Friday to the close of this past Friday, you can see in that week time span, we saw a decline of 137 points in the SPX. That is a decline of 2.1%. That is an ugly chart. If I zoom out, you can see how we've been trending lower, but it's starting to get steeper and steeper. It's starting to waterfall over. And this typically, you know, the market sometimes likes to cause uh the most people the most pain. And this market wants to cause some people some serious pain. We could see a serious uh down week this next week. It would not shock me if this waterfall effect continues and we see a serious bottoming out of this market, because a lot of times before this market can start going back up, sometimes you just have to shake out everybody, right? And you need a really, you know, a nice uh big red candle before, you know, all the the bears are out and everybody starts jumping back on the bull bandwagon. And we just haven't got that yet. Until you get that capitulation, right now I think you have to either ride the wave down or try to stay neutral. I'm not loading up on bullish trades right now, though, because until the market signals that we've hit that capitulation point, uh you can't get long here. Let's take a look at the NDX, which is the NASDAQ 100 index. This was even uglier than the SP. The SP was down 2.1%. The NDX on the week was down 3.2%. That is a move of 765 points down, right? And again, this is another chart. It looks like it was starting to waterfall over here. And moving on to the RUT, which is the Russell 2000 index, this is a bit of an oddity because if we look at the close of Friday, two Fridays ago to the close of this past Friday, this was actually a little higher in that time span, uh up about 0.5%, up half a percent. But uh, don't think that the Russell actually had a good week. The Russell had been the weakest on the way down the previous two weeks. It was actually uh the weakest indice going down. And then this past week, as kind of tech was really starting to lead the way down. And uh, the Russell is not as tech heavy as the NASDAQ. That's why this week, even though it's basically kind of an unchanged week in the Russell, uh, I'm not extremely bullish in the Russell right now. I they were just right now, this week, it was all about the big uh large cap stocks, it wasn't about the small caps. Moving on to DJX, which is the Dow Jones index. This was a pretty nasty chart as well. DJX down right at 1% on the week, and finally VIX, which is the volatility index. This is the volatility of the S P 500. VIX finished the week. We take a look at the close of the previous Friday to the close of this past Friday. VIX was up about$4.27. That is a 16% increase in volatility in that time span. And you can see we've actually been at this level here. This uh right now the VIX is trading at 31. I mean, we were trading just under 31 on Monday. We were also trading all the way up to 35 a couple of Mondays before that. So we've been at this elevated VIX level for some time now, and eventually uh until volatility starts coming in in a big way. The market's telling you uh we're not going up, right? When the market decides it wants to go up, VIX will contract in a big way. Right now, VIX is expanding. That's telling you that that move down is probably going to continue. Let's take a look at what some of the major sectors of the market did this past week. Let's start with energy because let's start with the sectors that actually had a positive week. Energy is obviously the oddball here because what's going on with crude oil? Crude oil keeps rising. I mean, that's the problem with this whole market right now is oil rising, which is terrible for most companies and most publicly traded companies in the stock exchanges. But for the energy companies, it's a good thing. So we actually saw XLE, the energy sector ETF, it uh had a gain of 5.5% on the week. It's just crazy strong. And then if we move over to XLB, which is the materials sector, this oddly enough, also had a pretty good week. This was up 4.1% on the week. If we take a look at the close of the previous Friday to the close of this past Friday, pretty strong chart there. XLU, which is the utilities sector, had a positive week. Now it had a really nasty week uh two weeks ago, but it hit a bottom. It looked like it found a floor, and this past week it kind of stair-stepped up a little bit. XLU finished the week up 2.1%. Again, that's the utilities sector. XLP, which is consumer staples, a lot of times when the market is doing bad, a lot of people use consumer staples as a defensive sector, right? And so a lot of times this tends to outperform when the market is doing bad. And consumer staples was able to eke out a 0.6% gain on the week this past week. XHB, which is the home builders industry ETF here, home builders, which had been really ugly for the last month, month and a half. XHB finished the week uh essentially unchanged on the week, which is a pretty strong week uh considering how the market was doing this past week, with SP 500 down more than 2% and the Nasdaq down more than 3%. The fact that the home builders actually were up about 0.2% on the week, that is pretty impressive for that particular industry. XRT, which is the retail sector, also uh was pretty resilient this week, finishing the week basically unchanged. If we take a look at the close of the previous Friday to the close of this past Friday in that one week time span, XRT really didn't go anywhere. Now let's talk about the sectors that had ugly weeks. This week, it was all about the tech sector leading us down. Let's take a look at XLK, which is the tech sector ETF. If you're looking at a chart with me here, if you're watching the video portion of this podcast, you saw just a crazy down move on both Thursday and Friday this week. Uh, it was in full-blown crash mode in the tech sector. XLK finished the week down 4%. If we take a look at the close of the previous Friday to the close of this past Friday, and of course, a lot of that is going to be some of the big mega cap tech stocks that were a part of this big down move. We'll get to those in just a second. Other sectors that had ugly weeks. Uh XLC, which is the communications sector. Uh, this is very tech related. Matter of fact, uh Meta and Google are big components of XLC. Meta and Google did not have good weeks. That's why uh XLC is down in a big way. This finished down 4.6%. XLF, which is the financial sector, ETF, also had a very ugly week, mainly because of Friday. Friday, we saw a steep decline in this. XLF finished the week down 2.6%. XLY, consumer discretionary. Consumer discretionary does well when the market's doing well. It does poorly when the market's doing poorly, right? So um this is not a defensive sector, right? So consumer discretionary you would expect to be kind of bad, and it was, it was down about 2% on the week. XLRE, which is the real estate sector, take a look at its chart. This is down 1.4% on the week. Now, this had a really nasty week the previous week. So if you take a look at the last month in real estate, it's not a pretty chart, right? This is not if you're primarily bullish on real estate, this is not the chart you want to be staring at right now. XLV, which is healthcare, was down 1.4% on the week. Its chart looks very similar to real estate. For the last month, this thing has just been nothing but uh down and to the right, which is again not what you want to be, uh, especially if you're bullish in this particular sector. Let's take a look at one other sector ETF, XBI Biotech, which is of course very much related to healthcare. But this one actually wasn't as weak as XLV. XBI, the biotech industry here, was actually down about half a percent. So pretty strong considering uh what was going on in the rest of the sector. So let's take a look at some of the big mega cap tech stocks because tech was so weak. Uh, what was the problem this week? Well, let's start with some of the biggest movers to the downside. What hurt us? Let's start with Coinbase because Coinbase had a move down of 18.4% on the week. Now, Coinbase is very heavily tied to the crypto markets, Bitcoin, Ethereum, and those markets didn't have good weeks at all. Coinbase did not have a good week at all. That uh 18% drop, that is that's a nasty drop, right? That is pretty ugly. Uh, some of the other big tech names, let's move over to some of the AI and chip-related names. Let's start with Google. Google finished the week down 9% on the week. Now, part of the ugly week in Google probably had to do with the lawsuit. Uh, there was a lawsuit that Google and Meta lost because of social media and how addictive it is and it's you know harming young people. There was a lawsuit. They're gonna have to pay you know millions or possibly billions of dollars. I didn't read the details of the lawsuit, but Google, because of YouTube, uh, lost that lawsuit, and that's part of why it was down nearly 9% on the week. Meta was also the big loser in a couple of lawsuits this week, and Meta was down 11.4% on this week. Uh this is a really nasty chart. Matter of fact, this might be the ugliest chart of like your Mag 7 type stocks. If you take a zoom out look of Meta, I mean, this thing was trading nearly$800 a share at one point just a few months ago, and now has a last price on Friday of$525 a share. That is a serious haircut in Meta. Moving on to some of the other big losers in the mega cap tech space. Uh, let's take a look at Microsoft. This chart, if you zoom out, Microsoft's chart just looks like death. This is ugly, ugly, ugly. And that's three uglies, right? Microsoft finished this past week down 6.6%. But if you take a look at a recent high it made, it was trading around$555 a share. Now it's trading at$356. So this thing basically dropped 200 points in like four months, five months, maybe. Yeah, right. This is that that's a crazy move. Matter of fact, because Microsoft is, in my mind, a real company, it's not going anywhere long term. I would love shares of Microsoft. I'm not saying, hey, right now, this moment is the time to go load up on some shares of Microsoft, but this thing really seems oversold. Uh there's no way that you can convince me that Microsoft uh deserved to go from$550 a share to$350 a share in four months. Uh, like you can't convince me that that's based on any kind of fundamentals. Some other tech names that had poor weeks, Palantir finished the week down about 5%. Now, Palantir has been a little more resilient than some of the other tech stocks. Obviously, Palantir is into you know security and defense. So Palantir is a little more resilient than like some of the chip manufacturers like Broadcom. Let's take a look at AVGO. AVGO finished the week down about 3.2%, but you can see it's been trending lower for the last few weeks. NVIDIA was also lower this week. NVIDIA finished the week down about 3% on the week. NVIDIA NVIDIA has actually been pretty strong when you think about some of the charts we've already looked at with Meta and Microsoft. NVIDIA has actually been trading sideways for a while in a market that has been trending lower. So I obviously it's had an ugly week this past week. But still, NVIDIA, if you're looking for a bright spot as far as the mega caps, NVIDIA seems to be the safest play. Amazon finished the week down 2.9%. And to round out some of the mag 7s, let's take a look at Tesla. Tesla finished the week down 1.7% on the week. Looking at the Tesla chart, though, if you zoom out on it, for the last three months, Tesla has done nothing but stair step down. It is in a clear bearish trend. Let's move over to some of the futures and commodities. Let's start with oil, and I'll pull up USO, which is the crude oil ETF, uh, rather than looking at the futures. So USO finished the week up uh 2.3% on the week. Now that is uh a little bit misleading because again, this is an ETF version of basically your CL futures. If we actually take a look at CL, because you'll get the full candles here because they trade overnight. You can actually see crude oil on Monday, and once we got the news that you know, Donald Trump uh and we've been talking with uh Iran and we're we're about to come to some agreement. You know, oil plummeted, which is what everybody wanted. Oil came down, the market spiked in a big way, and everybody was happy. And then Iran started saying, hey, we're not talking to those guys. We're not interested in peace. And you know, later in the week, you know, rockets started dropping again. You know, Iran's starting to attack people. Um, there's uh Houthis that are now attacking people, that you know, the Middle East, it's not it doesn't look like it's about to have any kind of real peace just yet. And because of that, uh, this move that we had on Monday was reversed the rest of the week. Uh, Tuesday, Wednesday, Thursday, Friday, oil just kept creeping back up to where CL finished the week back trading just above 100 at one point. Uh we it actually closed on Friday, just under$100 a barrel. Now, I don't currently have a CL position, but I do have an MCL position, the micro crude oil. I still have that strangle I've been defending for a few weeks this thing. I'm down uh$1,800 on it right now from two contracts of this strangle. I've been down more than four grand on it. I fought it back a little bit. I was only down about one grand on it on Monday when we got the big uh decline in oil, but then the rest of the week it went back up. But I'm fighting the good fight here. Yeah, I'm just gonna hold on to this and uh keep playing it as long as I can. If I can hold out and wait for volatility to come in in a big way and wait for the price of oil to also come in in a big way, I can eventually erase most, if not all, of this loss. I've just got to be able to stick it out long enough. So that is oil. Let's take a quick look at netty gas. So I'm gonna take a look at UNG, which is the natural gas ETF. Natural gas actually finished the week down. I take a look at the close of the previous Friday to the close of this past Friday. Netty gas actually finished the week down 0.9%. Let's take a look at the crypto markets. We already saw that Coinbase had a very sharp drop this week. Uh, Coinbase, I mentioned, very heavily tied to crypto. So you can imagine that the crypto markets not doing great. ETHA, which is the Ethereum ETF, saw a decline of almost 7% on the week. iBit, which is the Bitcoin ETF, saw a very similar decline. It was down 6% on the week. Moving over to the precious metals, gold saw a uh a week where it really didn't go anywhere. Uh GLD, the gold ETF, if we take a look at close of the previous Friday to the close of this past Friday, they're almost at the same level. It looks like it may be up about 0.3% on the week. If we move over to silver, which I do have a silver position, so let's take a look at SLV. Silver actually finished the week up. If we take a look at close of the previous Friday to the close of this past Friday, SLV was up 3.1% in that time frame. Right now I have shares of SLV that I'm deep underwater on. My cost basis on the shares is$78 and change. I do have a strangle as well. So you could consider this a covered strangle. Uh covered strangle is where you have 100 shares, and I don't really have to worry about the call on the strangle. If I get a sign, great, I'll give up my shares at$90 a share. That's a profit. And then the put down here, I sold the$5 put. I'm prepared to take another 100 shares at that price. So I'll average down if I lose on the put side. So that is your basic covered strangle. Covered strangle is a strategy you put on when you're very bullish in something, and also you're still kind of small. You would not put on a covered strangle unless you were prepared to take another lot of shares on that put side. Uh, if that's too big of a position, you wouldn't do a covered strangle. You just stick to the covered call by itself. Let's move over to the currencies. Let's start by taking a look at the dollar index. So I'm gonna pull up UUP, which is the dollar index ETF. The dollar was actually pretty strong this past week. The dollar was up 0.6% on the week, and if the dollar is strong, that's going to mean that the euro, which is the biggest component of the dollar index. Is going to be weak. They got an inverse relationship, the dollar and the euro. FXE finished the week down 0.3%. The second biggest component of the dollar index is the British pound. Let's take a look at FXB. It finished the week down 0.4%. And finally, FXY, which is the ETF for the Japanese yen. FXY finished the week down 0.5% on the week. One final thing to look at, let's take a look at the bonds. So I'm going to pull up TLT, which is the 20-plus year Treasury bond ETF. You can think of this as something similar to the ZB futures, except in ETF form. TLT finished the week down about 0.2%. So down but just slightly down. If you actually take a look at the proper futures chart, let's pull up ZB. You can see down, but just slightly down, but definitely on its lows. The ZB futures have been in free fall since the day the war started, which was right here. That was the its recent high. And ever since that day, the bonds have done nothing but go down Z N. It's going to have a similar looking chart. That's the start of the war, the high it made, and it's just been going down ever since. Now, these are kind of oversold kind of moves, in my opinion. If I was going to put on a trade in either the ZB or the Z N, I would put on a bullish trade. I don't know if I would call a bottom just right this second, but if I was going to put on a trade, this is one that I think will rebound quickly once the war is ended. So let's talk earnings this week. So this upcoming week is a special week because it is a market holiday. There will be a market holiday on Friday. It's the Good Friday holiday. So we're only going to have four trading days this week. Also, we're kind of in this dead area in between earnings cycles. The new earnings cycle actually starts the following week. You'll have some of the big banks report, and that'll the big banks are typically the first things to report, but that doesn't start until two weeks from now. So this upcoming week, there's really nothing to talk about for earnings. There's one reasonable company as far as something that has good option markets and that you could play. Nike does report after the bill on Tuesday. Let's jump into the chart of Nike because Nike right now is trading at a really low level. I mean, this thing has gone from$80 a share back in August of last year to$50 a share. Right now it's trading at$51.36. Has an IV rank of 53. That's very juicy IV. So you could definitely do something in Nike if you want. So let's talk about some trade ideas for this week. If I needed to put on some trades, what would I be looking for this week? Well, again, right now, based on the charts, there's a lot of things that are very directional right now. The market is in a clear bearish trend, right? Uh, oil obviously is in a clear bullish trend. Uh uh, precious metals, clearly in a bearish trend. Crypto, clearly in a bearish trend. Uh so for me, I would just ride the momentum on some of this stuff. I wouldn't try to be a contrarian in anything. So XLE, the energy sector ETF, we looked at this earlier. Let's pull this chart up. For me, because of the strength of the energy sector recently, I would ride this wave. You know, if I needed a trade, I would go to the 48-day cycle and I would just sell, let's sell the 17 Delta put. Let's see what we get for it. 81 cent credit on a buying power reduction of just under$600. That's not a bad play. Uh, maybe sell a couple of those puts. You get$162 credit on a buying power of$1,200. I certainly like that. If you wanted to add calls, you certainly could. It does have a good IV rank. You could turn it into a strangle, but I think you're gonna be fighting the calls on the way up right now. Because this thing just goes up all the time. I think the calls are not worth it. I think they're gonna cause you more problems than what they're worth. I would just stick with the short puts right now. Another product that I would consider trading right now if I didn't already have a position is SLV. Now, again, I'm already in my covered strangle, but if you're not in SLV, uh don't be like me and put on a very bullish trade like a covered strangle. The only reason I'm in that position is because I had shares way back here. And you know, I would just put on a strangle in this if I were you. Right now, silver has a very high IV rank of 67. Really good options premiums. You can go out to the 48-day cycle. And if I were looking for a decent strangle, I would go sell maybe the 15 delta put, which gives you a 155 credit on a buying power reduction of$490. That's crazy good premium on a 15 delta put. And then go at a 15 delta call, and you can sell a 15 delta call and make the whole credit now, the total credit on the trade,$2.80 on a buying power reduction of$490. You do not get opportunities like this very often where the risk versus reward is so juicy there. Now, this particular 15 delta strangle, the pop on the trade's reporting that the pop on the trade is 76% and the P50 numbers 89%. I'm recording this on the weekend, so these numbers may be slightly off, but it's a very high probability trade. If you manage the trade at 50% max winner, which is always how I manage my strangles, if you manage at 50%, I would say that easily you should win 85 plus percent of the time on this trade. One final product that intrigues me a little bit is iBit, the Bitcoin ETF we took a look at earlier, had a high V rank of 55, and it's been trading in a nice range. Like Bitcoin and Ethereum made a low a couple of months back, and they just kind of sat in a very tight range for the most part. I mean, they have up and down days, good two-sided action, but in the end, they don't seem like they're in a hurry to go anywhere. And because of that, I think a strangle makes a lot of sense in iBit. I could go sell the 17 Delta put and I could go sell the 18 Delta call in the 48-day cycle. I get a 151 credit on a buying power reduction of 845. For me, that's pretty good risk reward. The pop on the trade 70%, the P50 numbers 88%. And the great thing about doing things in these ETFs like XLE, SLV, iBit, is on the put side, do you really mind taking shares of energy sector or the silver uh silver shares or Bitcoin shares? Do you really mind that? Probably not. So this is a great way to start the wheel is uh you know, selling puts in these products. Now the cost side you may have to worry about a little bit, but if Bitcoin all of a sudden just takes off and starts going up, that probably means that like the stock market's also going up, oil's probably coming down. You know, that's probably you you'll hate this trade, but there's other trades that you probably have on that have been problem trades that are probably working out for you. That's it for this week's edition of Market Outlook. For those of you listening to the audio version of the podcast on Apple or Spotify, please give the show a five-star rating. Help us grow in the algorithms. For those of you watching the video portion of the podcast on YouTube, check some of the links in the show description because you'll find a link to my book, The Super Wheel Option Strategy. This book is published over on Amazon. It's about one of my favorite option strategies, the wheel option strategy. Also, check out the DT Options Discord, which is for members only. It's a paid Discord. You have to sign up over on my Patreon. And this Discord channel is interesting because I hold a live voice chat there each and every trading day. We start 15 minutes before market open, and I talk about my portfolio, go through my options positions, talk about interesting trade ideas. You guys get to share your trade ideas. We have a nice little trading community there, and if that interests you, please go to the DT Options Patreon page to sign up to get access to those Discord chats. All right, guys. Peace.