We are clearly laying out a cautiously bearish short-term outlook on the broader equity indices, with technical evidence suggesting a developing downtrend in the S&P 500, Dow Jones, and Nasdaq 100. Let’s break this down and add some context, especially if we are trying to digest both the sentiment and the market mechanics behind it.

Following a month’s reprieve, US President Donald Trump declared yesterday that the 25% tariffs on all goods from Mexico and Canada would proceed. In a speech late last month, Bank of Canada Tiff Macklem warned the economic consequences of a protracted trade conflict would be severe and would represent the most significant trade shock since the 1930s.

Historically, a strong performance in January has often signaled a promising year ahead for the stock market. This observation, known as the January Barometer, was first identified by Yale Hirsch, the founder of the Stock Trader's Almanac, in 1972.