Failed Recovery: Oil Above $100, Equities Stall, and a Catalyst-Heavy Week Ahead
Weekly Outlook 03/16/26
Market Recap
It was another week where the market attempted to find its footing and came up short. A sharp reversal off Monday’s gap downs gave way to a slow fade through the rest of the week, and by Friday the indices had closed below where they opened on Monday. The geopolitical situation remains unresolved, the economic data has deteriorated further, and the tape is reflecting all of it.
Oil: The Blowoff That Wasn’t
After the prior week’s violent move higher, oil opened Sunday with what looked like an exhaustion gap and spent the first part of the week giving back some of those gains. Mean reversion took hold early and there was a window where the geopolitical premium appeared to be at least partially unwinding.
That window closed quickly. The Strait of Hormuz remains effectively shut, Iran’s supreme leader publicly reiterated there would be no reopening, and with no credible path to de-escalation visible, buyers came back into crude through the back half of the week. WTI settled at $98.71 by Friday, and Brent crossed $100 for the first time since August 2022, now sitting roughly 40% above its level before the Iran strikes began. The Defense Secretary’s comments that the situation was under control did little to move the needle, and markets continued to price in a prolonged disruption rather than a near-term resolution.
Equities: Rallying Into Resistance
Monday opened with broad gap downs across SPY, QQQ, and IWM, and the intraday recovery off those lows looked like it had some momentum behind it. The problem was where that recovery ran out of steam. All three indices rallied directly into declining moving averages and stalled, unable to reclaim them on a closing basis, and spent the rest of the week drifting lower from there.
The weekly close ended up below Monday’s opening print, which is about as clear a summary of the week’s price action as you can get. SPY is now forming a rounding top just above a support level that has held for several months but is starting to look fragile. Both SPY and QQQ are within striking distance of breaking their 200 SMAs, and the overall structure of the chart looks fragile. The S&P 500 is now down 3% year to date and sitting at its lowest closing level since late November.
The Macro Data
The economic releases this week added to the pressure rather than offering any relief. Q4 2025 GDP was revised down to 0.7% annualized, nearly half the prior estimate of 1.4% and well below the 1.5% consensus. February payrolls came in at -92,000, a significant miss against expectations that had been centered around a gain of 50,000 to 60,000, and the unemployment rate ticked up to 4.4%. The combination of slowing growth and a weakening labor market, layered on top of an oil shock still working its way through input costs, is not an environment that makes rate cuts straightforward. Markets are now pricing in a single cut for all of 2026, compared to three cuts that were expected at the start of the year.
Crypto: Relative Strength Worth Noting
While equities were struggling to hold any recovery, BTC and ETH were telling a somewhat different story. Both have largely avoided the selling pressure that has weighed on the broader market in recent weeks, and that divergence has become increasingly difficult to ignore.
There was a strong push higher on Friday, though it ultimately retraced through the session and left neither asset with a meaningful close above recent ranges. Over the weekend, support held, and as of now both remain rangebound. The overall picture is not one of breakout momentum, but the fact that crypto has held its ground while equities have continued to deteriorate is a data point worth keeping on the radar heading into the week ahead.
VIX
Volatility remained elevated throughout the week, with the VIX spiking to an 11-month high before partially pulling back to close Friday at 27.19. Options pricing across the board reflects a market that is still highly volatile.
Going into Next Week
The primary driver of everything else right now is the Hormuz situation, and it has not meaningfully changed. A decisive break below the 200 SMA on both SPY and QQQ would open up room for lower, and with the macro backdrop where it currently is, there is not an obvious catalyst to prevent that test from happening.
Watchlist
The macro calendar is heavy this week, with two major events running simultaneously. The FOMC meets March 17 and 18, with the rate decision and updated dot plot on Wednesday afternoon. Given how aggressively rate cut expectations have been repriced in recent weeks, the dot plot will likely draw more attention than the decision itself. Running at the same time, Nvidia’s GTC conference kicks off March 16 and runs through the 19th.
With VIX still elevated, the week will likely trade with high correlation across the tape. Relative strength is worth tracking but it is better used as a shopping list for after a correction has run its course rather than a reason to buy into ongoing weakness.
MU 0.00%↑ reports earnings this week and is one of the stronger stocks in the market right now. The result will be closely watched for what it signals for the broader memory complex, including SNDK 0.00%↑.
NVDA 0.00%↑ is important to watch across the week given GTC running alongside a sensitive macro backdrop. The stock’s reaction to both the conference and the broader market will be telling.
DELL 0.00%↑ has been holding up strongly since earnings and remains one of the more constructive setups on the long side.
NBIS 0.00%↑ broke out this week following news of a $2 billion Nvidia investment and is showing some of the stronger price action in the space.
HIMX 0.00%↑ and AAOI 0.00%↑ both saw increased volatility after being mentioned in Citrini’s latest post, worth monitoring for follow-through.
EONR 0.00%↑ is an energy microcap seeing movement driven by the war premium building in oil since the Hormuz closure.
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