ALPHA INSIGHTS: Interim Bulletin - 5/12/25

A Few Quick Thoughts on Today's Price Action

Another 90-day tariff pause, another massive upside gap and 3-4% gain for the major averages. Has anything actually been accomplished? We don’t know, but it’s doubtful. Just as it was doubtful that tariffs would remain at 145% and 125% between the U.S. and China, respectively. The news further alleviates the market’s cautious attitude toward risk taking. Indeed, today’s price action suggests that the market has turned outright optimistic with the CNN Fear & Greed index reaching a new recovery high of 66 today. But, this buying panic comes as the rally off the April 7th low is getting long in the tooth. As such, we think there is a high probability that it was an “exhaustion gap.”