Tariff Tantrum – ’20 vs ‘25
- Doug Wakefield
- Apr 4
- 3 min read
After today’s rare and massive drop, I wanted to share some thoughts and history.
First, I return to the CNN fear and greed index. Remember, this is a very technical tool that computers and humans can use. We are not measuring emotions, something that cannot be measured collectively and accurately.
I would encourage you to learn more about how the various parts of this index works.
As you can see below, at the end of April 3, 2025, the first full day after Liberation Day Tariffs were announced, this indicator has reflected a brutal day in the markets…but one that has pushed the indicator from fear to a single digit number in the indicator. This is an extremely rare reading.
I searched for “lowest readings in CNN Fear and Greed Index”. I found an article on Investopedia that gave me this information.
On March 12, 2020, during the rise of the COVID-19 pandemic, the index fell to an annual low of 2 when stocks plunged 10% and entered a bear market. [bold and italics are mine]
So today, I decided to go back and look at this decline, since it produced the LOWEST fear and greed index number I have ever seen. We all certainly know what the world news was then.
Is the current situation the same? Of course not. The global tariffs were just released yesterday, and after today’s big drop, it would support this trend continuing lower in the near term.
However, we also notice that when the record low of 2 was produced in March 12, 2020, it wasn’t much later that a weekly move upward began. The pendulum changed direction in 2020, and we know it will do the same again.
Correction or Bear?
Today the S&P 500 - the index that has more financial instruments tracking it than any equity index in the world - closed 12.4% below its high in February. The March 13th close of 5521 was very close to the 10% level shown above. Now it appears we are headed for the 20% level, which is where commentators would move from calling it a correction to a bear market.
Could this happen in a few days or over a couple of weeks? None of us know. But the bear market level (20% from high) for the S&P 500 is now critical.
What are you doing?
Because I am a former investment advisor in Texas I cannot give any specific advice regarding stocks, ETFs, or other financial products.
However, I can share ideas regarding general tools.
The one tool that has done well as we have watched stocks decline (since February) has been gold.
[Updated Chart from previous writing.]
Will the 3000-level hold on gold? Will it or other metals enter a correction soon?
I am preparing another article about gold that I will release in the next 2 weeks. It is about historic events that are taking place as we move toward a major banking event in July of this year.
I also diversify, having ETFs and stocks, most being specialty areas such as uranium, oil, metals, and inverse ETFs. I also make moves from time to time.
Finally, cash has been a major holding since 2023. I have reduced it some this spring.
I am not you, so this is only to give you ideas, NOT RECOMMENDATIONS since everyone’s situation and tools are different.
And last, I have been adding to my small collection of crypto coins since the fall of 2023 during up and down markets. I have found it interesting that Bitcoin has stayed in a tight range for weeks and even today.
As always, if you have a question or would like to make a comment, please post it below. You can also respond by using the group email that alerted you to this post.
As always, please share with others if you find this of value. Thanks.
Disclaimer: Best Minds Inc was closed in 2018. I am retired. Nothing I am writing should be taken as advice to buy or sell any form of security or asset. Everyone must study and consider their own situation before putting money anywhere, as well as understand that they are living in a time where major changes at the highest levels of money are taking place. These writings are free.
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