Special Update: The Ivory Hill RiskSIGNAL™ Has Turned Red
What It Means, What We Did, and What Comes Next
Our long-term signal flipped red on Friday, March 20th. First time since March 7, 2025.
Technicals were already weakening before the signal change, so we front-ran the signal by raising cash earlier in the week. Core equity models are now sitting at 40-51% in short-term T-bills.
Oversold markets can bounce. But any rally while the RiskSIGNAL™ is red is a selling opportunity.
The chart says it all. We’re rolling over. The signal agrees.
Three Forces Are Driving This Market. None of Them Are Resolved.
The Strait of Hormuz is effectively closed, and Trump is threatening to bomb Iran’s power grid within the next 24 hours if they don’t open it back up. Nearly 20% of global daily oil production is trapped while the Strait is closed. That is not a headline risk anymore. This is a live military and economic event happening before our eyes. And markets have not fully priced what comes next if he follows through.
If we take out Iran’s power grid. The short-term market reaction will likely be:
Oil spikes hard. Strait stays closed longer, maybe indefinitely in the short term. $100 oil becomes the floor. Energy stocks rip. Everything else gets hit.
Gold goes up. Treasuries could see a flight-to-safety bid. The dollar strengthens, continuing its uptrend.
Global equities sell off fast. The market hates open-ended military conflict with no clear exit.
The weekly expected move for the S&P 500 this week is 245 points in either direction from Friday’s close of 6,506. That puts the upside target at 6,751 and the downside at 6,261.
The options market is also pricing in a wider 2 sigma range of 6,860 on the upside and 6,353 on the downside.
And none of that accounts for Iran. If Trump follows through on the bombing threat, 6,261 is not the floor; you could easily blow through the downside level fast.
Private credit is cracking quietly. Redemption gates are going up at alternative asset managers. If it spreads to banks and larger institutions, we’re having a very different conversation. One that rhymes with 2008.
And then there’s AI. The spending is massive. The ROI is still unproven. Good headlines remind investors why it matters. Bad ones make people question whether any of this capex ever pays off.
These three forces drive earnings. And earnings drive where this market lands.
If things get worse, earnings estimates haven’t even started to reflect the damage. Multiples compress. That support zone in the low 5000s on the chart becomes the destination. That is a 20% drop from current levels. It is not a crazy outcome if all three of these risks go the wrong way at the same time.
If things get better, the picture flips. Hormuz opens. Private credit stress stays contained. AI capex starts showing real returns. Earnings hold up, and multiples can support a move back toward the highs. That path exists, too.
Right now, neither case is off the table.
The RiskSIGNAL™ is red. We are not guessing which way this resolves. We are protecting capital until it does.
And remember - The one fact pertaining to all conditions is that they will change.
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Best regards,
-Kurt
Schedule a call with me by clicking HERE
Kurt S. Altrichter, CRPS®
Fiduciary Advisor | President
Disclosure
The RiskSignal Report is published by Ivory Hill, LLC. All opinions and views expressed in this report reflect our analysis as of the date of publication and are subject to change without notice. The information contained herein is for informational and educational purposes only and should not be considered specific investment advice or a recommendation to buy or sell any security.
The data, models, and tactical allocations discussed in this report are designed to illustrate market structure and positioning trends and may differ from portfolio decisions made by Ivory Hill, LLC or its affiliates. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
Ivory Hil, LLC, and its members, officers, directors, and employees expressly disclaim any and all liability for actions taken based on the information contained in this report.