In this post we use VecViz’s dashboards to examine the strongest Vector Sets for SPY anchored to tops or bottoms occurring in the pre-Covid period of Trump’s first term to see what insights they offer at this moment.
Vector Set vs2: Anchored by 2016-2018 Turning Points
As of yesterday’s close (April 2, 2025), the second strongest Vector Set for SPY, vs2 (displayed below), is anchored by the February 2016 (nine months prior to Trump’s first election win) and April 2018 market bottoms and the January 2018 top. These “VecDates” partially encompass the period of tariff policy actions during the first Trump administration, as well as the significant rhetoric preceding them. We have long classified the “Trump Trade War” as a macro “VecEvent” for this timeframe.
The 1.0 level of vs2, representing the ceiling of its core range, stands at 537.25. SPY closed yesterday at 564.52. As of this writing (intraday, April 3, 2025), SPY is trading around 541.8.
A key question arises: Will the newly announced tariffs cause SPY to retreat back into the core range of vs2 from the higher (“leveled up”) position it has occupied since late April 2024? While these new tariffs appear larger in nominal terms than those implemented during Trump’s first term, and we have much less capacity for fiscal stimulus than we did during Trump’s first term, significant nominal inflation (SPY is priced in nominal dollars) and accelerated productivity growth have occurred since April 2018. Given these potentially offsetting factors, it is not immediately clear whether these tariffs are substantial enough to push SPY back into the core of vs2.
However, for those who believe the tariffs are significant enough, note that the center of the vs2 core range lies between 523 and 515, with the floor of the core (the 0.0 level) situated at 501.
Vector Set vs4: Incorporating More Recent Vectors
Want a Vector Set that captures Trump term 1.0 up through more recent times? The strongest vector set that does so is vs4, displayed below, which is anchored by the Sep2018 and Jul2024 tops and the Oct2022 bottom.
We closed yesterday (4/2/25) a little bit above the center core, which starts at 550 and extends downward to 520. Should the tariffs announced yesterday push us materially lower within the core of channel vs4? Or perhaps through the entire core of vs4 into its “leveled down” section?
These 2025 tariffs along with the DOGE spending cuts are clearly bearish vectors from a near term economic growth perspective, but keep in mind that the core of vs4 contains the low reflecting close to 500bps of Fed tightening in response to inflation, and also very nearly contains the Covid low. It’s not yet clear that the tariffs announced yesterday, even in combination with the “DOGE” related cuts to government spending, are on par with either of those bearish vectors. That said, just in case you think they are, please know that the floor of the vs4 core, the 0.0 level, is at 472.
Other analytics, all as of yesterday’s close (4/2/25):
Some VaR levels for today: the 95th%tile is at 548.51 and the 99%tile is at 527.11. As I type we are at 541.8, already lower than bell curve based Sigma’s 99%tile VaR for today of 553.35.
Some longer term perspective: Expected Down Body (EDB) for 5/1/25 is 544.35. Expected Down Body is the probability weighted average (i.e., expected value) between the current price and the 95%tile downward. Are these tariffs, as bad as they are, really a “tail” event given all the negotiating that will occur over the next month?
The V-Score for SPY coming into today was a +2 on a -12 to +12 scale.