Weekly Markets #1
Market recap for 21st March 2026
War, what is it good for? Absolutely nothing.
Despite the fact that Trump tweeted about ten times since the Iran conflict started that it’s ending, markets aren’t buying it. The S&P 500 dropped for a fourth straight week, the Russell 2000 fell into correction territory (defined by a 10% drop from the highs), and all major indices closed the week below their 200-day SMAs, the official 9/11 for all long-only trend following portfolios.
The Fed didn’t help either. Powell held rates but basically told markets to forget about 2026 cuts as long as oil keeps climbing. Within a day, every major central bank followed with hawkish holds. The conversation flipped from “when do they cut” to “will they hike,” the sharpest monetary policy repricing since 2022. Stagflation isn’t a what-if anymore. It’s the base case. PPI came in at double consensus, gas is tracking toward $4 a gallon, and that alone adds 40-60 bps to headline CPI in the months ahead.
This is also showing up in bonds. TLT, LQD, and IEF all got hit hard last week, and the skew confirms traders are aggressively bidding for downside protection across fixed income. Which is honestly not that big of a surprise considering large speculators were pilling into bond futures longs in Q1.
The only real bright spot was crypto regulation (SEC and CFTC jointly classified 16 assets as commodities - which means less regulation headache) and AI infrastructure spending, but even Micron’s blowout quarter got sold into. When the best earnings in a sector can’t hold a bid, that tells you something about the mood. you something about the mood.
The calendar this week is packed (flash PMIs Monday, UK CPI midweek, core PCE Friday) but honestly, none of it matters as much as the next headline out of the Middle East.
War is the dominant variable right now. It's driving oil, repricing rates, and setting the tone for everything else. Until the conflict picture changes, data releases are secondary. Markets trade headline to headline.
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SPX
According to the composite regime indicator, SPX has been in risk-off territory since the start of March. This is measured by several regime indicators such as VIX term structure, credit spreads, and market breadth.
While some of these flips got bought up quickly in the past, this time that doesn't seem to be the case. What makes me think we might still be heading lower is that while the market keeps grinding down, we haven't seen any of that signature elevator-down price action. VIX itself is staying elevated but not really spiking to levels where aggressively buying the dip makes sense.
The breadth chart probably tells a decent story how holding individual stocks feels like right now.
Breadth was catastrophic on Friday: 63 advances vs 415 declines on the NYSE, the worst reading of the week and suggesting capitulation-level selling.
One thing I find interesting is that the 25-delta skew actually moved higher over the last few weeks. This is quite unusual, as traders tend to very aggressively pay for put protection during times like these.
Looking at the chart, the key area where I'd be happy to dip into longs is between 620-610 as it is confluent of prior resistance area and would also hit the peak panic territory from momentum perspective. I'm also watching a possible reclaim (or fail) of the 660 level, which marks prior support and the 200 DMA.
The broad stock market also isn't in peak panic just yet, with skew not hitting strong extremes on a yearly lookback.
The one exception is SMCI, which plummeted 28% after federal prosecutors charged three company associates, including a co-founder, with illegally smuggling $2.5 billion worth of AI servers to China. They got caught on CCTV using hair dryers to peel off serial numbers and restick them on dummy servers to fool inspectors. You kind of have to respect the hustle there.
Crypto
While crypto has been holding relatively well since the conflict started, showing similar relative strength to what we saw in April of last year, most coins are still deep in the red after the early-year selloff.
This year, Bitcoin had the highest negative composite readings since 2022 low, I have shared more thoughts about that in early February, and honestly not that much as changed since.
I nibbled in spot around 60k, which I believe is a solid level to buy, but since it's a monthly zone the invalidation is very wide, stretching towards the low 40s. After the selloff in the second half of the week, the market looks fairly tired, so I wouldn't be surprised to see another revisit of that zone.
I also think Ethereum is worth mentioning this week. While the trend is still obviously down and the composite index remains negative, we saw decent outperformance against BTC. The main driver was BlackRock launching ETHB, their staked Ethereum ETF on Nasdaq, which pulled in $155 million on day one and helped drive record weekly ETF inflows of $160 million. Unlike regular spot products, ETHB lets institutional investors capture around 3% staking yield on top of price exposure, which in a higher-for-longer rate environment actually makes ETH a more compelling hold. ETH rallied over 20% in eight days off the back of it.
If ETH is really strong here and about to catch a bid, I don't think there's that much reason to go lower. A fakeout under current support is acceptable, but it should get quickly bid up if the buy interest is really there. Losing the 2100 level will most likely just continue the ETH curse and roll over to test yearly lows again.
HYPE and TAO were the standout performers last week, rallying hard while everything else bled.
Hyperliquid really timed well the launch of perpetuals for tradfi, Its 24/7 oil perpetual futures pulled over $5 billion in WTI volume in just 72 hours, and all that fee revenue feeds directly into HYPE buybacks and burns.
On top of that, ecosystem launched S&P 500 perpetual futures in partnership with NASDAQ on trade.XYZ.
TAO ripped 17% on Thursday after Jensen Huang discussed decentralized AI training on the All-In Podcast, specifically referencing a model built on Bittensor network.
Grayscale filing for a TAO ETF and the token picking up SEC reporting also helped.
Both tokens prove that even in a risk-off macro environment, assets with genuine narratives can disconnect from the broader market.
HYPE still looks solid for more upside as long as $35 holds. TAO on the other hand hit resistance and struggled on Friday, so I'd be more patient there and wait to see if it can reclaim 310-315 before placing any bids.
Rest of the market
While the war is extremely unfortunate and I'd much rather not be living on the brink of World War 3, it brings a lot of opportunities and volatility across the board. Using 25-delta skew on CME and ICE options can give you a very quick narrative check across the entire futures complex.
The dollar has been one of the few clear winners since the conflict started. DXY surged from the mid-96s in February to above 100 in March, its best run since 2022. When everything else is getting hit, stocks, bonds, even metals , cash is king and the dollar is where global capital runs first.
The fact that Brent is outperforming WTI tells you the supply disruption premium is concentrated in Middle Eastern and waterborne crude, which hits Europe and Asia harder than the US. That relative insulation gives the dollar a double tailwind: safe haven flows plus less direct economic damage compared to other major economies.
The strength is also a headwind for everything else, putting pressure on commodities, emerging markets, and risk assets across the board.
The euro rallied towards the end of the week, especially after put skew hit its lowest level since 2024. But price is still in a downtrend and testing some overhang levels. If the euro stays below 1.16 and the dollar can hold 99, I’d assume the trend continues. I’ll be watching those levels closely next week for possible trade opportunities.
One thing worth adding is that large speculators have been heavily shorting the euro for the last couple of weeks. More often than not, this kind of excess positioning ends up biting them in the ass, so if the trend shifts, the position unwind could drive a strong bounce higher.
