OVERVIEW
The Weekend Rip: April 13, 2025

It was a wild week in markets. Stocks recouped some of their recent losses, but volatility and uncertainty continued. Thank goodness it’s a four-day week ahead. 😵‍💫 

Let's recap and prep you for the shortened week ahead. 📝

What Happened?

😱 On Monday, stocks experienced a “Black Monday” bounce after initially falling over 6% across the board. Rumors of a 90-day tariff pause sent stocks soaring before the White House called it “fake news.” Plus, there’s always a bull market somewhere, as Janover Inc. soared on its crypto pivot.

😐️ On Tuesday, the VIX closed at a five-year high after an initial rally failed to hold. Concerns from businesses, political leaders, and significant investors continued to drive market volatility. Insurance companies caught a bid on the latest Medicare payment news, and marijuana stocks were smoked to new lows.

📈 On Wednesday, stocks had a $4 trillion day after President Trump tweeted that he would pause tariffs on nearly every country with a rate over 10%. Before doing that, he tweeted “This is a great time to buy,” drawing scrutiny about his use of social media to communicate policy decisions. Plus, companies like Walmart and Delta began to pull forward guidance, and healthcare stocks braced for pharmaceutical tariffs.

🐻 On Thursday, the market gave back roughly $2 trillion of its gains as the U.S. Dollar Index and treasury bonds sold off sharply. On a positive note, consumer prices fell MoM in March, helping to renew hopes that a Fed rate cut could be coming sooner rather than later.

🥵 On Friday, stocks closed the week out in the green as big banks kicked off earnings season. Gold hit new all-time highs, the Dollar Index fell to three-year lows, and the University of Michigan’s consumer sentiment survey highlighted a new level of negativity. Apple was among the leading stocks as traders bet on weekend news.

🤩 This week's Stocktwits Top 25 showed underperformance vs. the major indexes.

Here are the closing prices: 

STOCKS
Introducing The “Stocktwits Sentiment Index” 👀 

We all know the traditional CBOE Volatility Index ($VIX), which is typically used as a fear/greed measure on Wall Street. It represents the annualized implied volatility of an S&P 500 stock option with 30 days to expiration, or in other words, it defines the market’s expectation for how volatile the market will be over the next month. 📆 

The higher the volatility index, the larger the expected swings in the market.

On a day-to-day basis, traders use it to estimate the expected daily percentage move in the S&P 500 by dividing the value by 16. Currently at 37, the market is pricing in a 2.31% daily move. Earlier in the week, when it reached 60, a 3.75% daily move was expected. 🤯 

This is a market-derived version of expectations, but what if there was a way to measure sentiment among retail investors and traders in real time based on what they’re talking about? Introducing the Stocktwits Sentiment Index. 🤩 

The chart below shows this data that we’ve begun to tease, calculated using the previous week's bullish vs. bearish messages on the Stocktwits platform. And as we can see, it made a new high last week alongside the CBOE’s VIX. 😨 

However, we can see this data's real value when we zoom in to a six-month view. The Stocktwits Sentiment Index began to tick higher in late January, a month before the CBOE Volatility Index started to increase. In other words, retail investors and traders were sniffing out trouble before the broader market did. 🧐 

What’s the reasoning for this? As a market technician/analyst and Stocktwits user for the last decade, I have a theory. Stocktwits users are active traders and investors, typically buying/selling individual stocks. As a market technician, I know that market tops and bottoms are processes, not points, with individual stocks (or market breadth) diverging from index performance before major turns. 🕵️ 

So, if individual stocks tend to lead the indexes and Stocktwits users are trading individual stocks, they’ll see the carnage (or opportunity) ahead before the indexes break down (or out). And based on this recent pullback, that seems plausible.

Many of the market’s most popular stocks either stalled or broke down in January and continued into February. So, Stocktwits users turned progressively more bearish. Eventually, when enough of them were falling, the major indexes began to take notice and start falling too. 📉 

So the question now is, are Stocktwits users spotting opportunities yet? Based on last week’s data, the community is still skeptical of the market’s rebound as the Stocktwits Sentiment Index hit a new high along with the CBOE’s VIX.

What may indicate an improvement is something called a “divergence.” Traders and analysts look for instances where the market makes fresh lows, but the Stocktwits Sentiment Index makes a higher low, signaling improving sentiment even as prices drop. And vice versa when spotting market tops. 🔍️ 

I joined “Trends With Friends” last week to discuss the Stocktwits Sentiment Index with Stocktwits co-founder and CEO Howard Lindzon and his friends Phil Pearlman and Michael Parekh. We touched on it at the 18:00 minute mark and will provide an update on this week’s episode, so tune in on Tuesday at 11:00 a.m. ET. 📺️ 

Until we integrate this data into the Stocktwits site/app, we’ll post an updated version from the Stocktwits Handle each day after the close. We’ll pin it to the $VX_F stream so you can stay updated on its development.

In the meantime, let me know what you think of this data and my theory above! 🧠