Seemingly as quickly as it went up, Commodities have fallen down into the third position within the NDW DALI rankings… but perhaps not quite for the reason many would have anticipated. With continued unrest in the Middle East over the last few weeks, energy focused names have driven up towards the top of the rankings, seeing the likes of crude oil and other areas of the energy complex reach levels not tested for a handful of years. The swift nature of the supply shock saw many representatives move into heavily overbought territory on their default charts, leading lots of recent commentary to site the possibility for normalization in the near-term as the situation surrounding the ongoing conflict continues to develop. Energy prices generally fell on Monday (3/23) as news surfaced of further delays in US strikes of key facilities after there had been some apparent progression in talks to end the conflict. While it is certainly still too early to tell if this is genuine progress in de-escalation or just a bluff from President Trump, crude oil fell as much as 12% from this weekend’s highs to cool off in the low $90’s. There is obviously still plenty of room for continued volatility in the near-term, but any news of progress will likely continue to send energy lower.

While further declines in energy names would undoubtedly yield further deterioration for the commodities group within the broad rankings, the group was not the main driver of Monday’s move lower within the overall DALI rankings. Precious metals have suddenly struggled quite mightily, seeing the likes of silver (SLV, -4.5% YTD) or gold (GLD, +4.5% YTD) trade well off 2026 highs. While both funds maintain strong fund scores, there is no question that things have technically deteriorated and it isn’t the time to just blindly buy into the space like we might have been able to do throughout 2025. SLV, included below, returned to a column of O’s with intra-day action on 3/23, putting in a localized level of resistance below a major level of support in the mid-$60’s. Now trading for roughly half of the levels we saw during the meteoric rise earlier in the year, there is certainly cause for a bit of concern in the near-term.

To close today’s piece, we will refocus on the DALI rankings. With the updates to the rankings on Monday’s morning, commodities lost 40 signals in a single day as major representatives for the space returned to RS sell signals against other areas. For reference, the 40-signal drop is the largest single day decline in signal count for the group since the start of our data in 2002 and represents a roughly 15% decline in total signals. While there could certainly be further volatility in store, the move confirms some (relative) strength for both domestic and international equites. The move also highlights the need for a process in following the rankings- waiting for a major signal landmark (10-15 signal difference) before making broader shifts or waiting until the end of the month can help prevent whipsaw and confirm strength in one direction or the next.

The Russell 2000 (RUT) was up as much as 9.5% to start the year on January 22nd, but has since fallen 10.3% from highs, entering a technical correction at the end of last week. Additionally, the index moved back to a negative trend after completing its third consecutive sell signal, ending what had been an extremely solid run since April. The fund score of iShares Russell 2000 ETF (IWM) is down to hold territory at 3.77, which is 0.82 points lower than its highs last year, leaving it below a 4.0 score for the first time since last September. Given the deterioration, what have previous corrections for small caps looked like, and when might things turn around?

Looking at the Russell 2000 since its inception in 1979, there have been 23 instances in which the index set a new all-time high, then moved into a 10% correction. Of those 23 occurrences, 70% went on to fall at least another 5%. Meanwhile, the forward returns after the index initially moved into a correction were below average across the board. Specifically, the index was flat on average over the next three months while averaging one-year returns of only 6%. It’s also taken the index an average of 15.6 months to return to ATHs after first moving into a correction. Consequently, recent declines among small cap stocks could indicate a more subdued year. While traders might want to buy the dip at every step of the way for RUT, doing so has been more fruitful when waiting until the index moved into a bear market, as a 20% decline is when RUT's forward returns moved above their baseline average. That said, small caps have been prone to sharp reversals in both directions in recent years, so the index could still defy historical norms and rebound quickly, especially given the acceptable levels of relative strength from the group currently.

While small caps have been hit the hardest within domestic equities, the broader market hasn’t been immune to downside pressure either. The S&P 500 (SPX) set new all-time highs in January but has since fallen 6.8%. Declines of this magnitude are relatively common for SPX, as the index has made 66 trips from all-time highs to a decline of at least 5% going back to 1950. Historically, declines of 5% to 10% for the S&P 500 were relatively subdued, with markets entering a correction only 35% of the time before returning to ATHs. The median recovery back to highs has also been a relatively quick 2.3 months. Meanwhile, the one-year forward returns for the market were largely normal, averaging an 8.3% gain. However, recent pullbacks have been more notable for the speed of downside rather overall magnitude, with the index declining almost 6% in the last month alone.

While a month that bad feels abnormal relative to the last few years, it’s certainly not the first time something like that has occurred. The current bull market officially began on October 12th of 2022, with the S&P 500 gaining 73% from that point. However, there are still seven other times during this bull where SPX declined 5% or more over a month. Encouragingly, the market was higher three months later in each of those seven instances, averaging a gain of over 10.5% as stocks climbed out of oversold territory. Granted, it would be unlikely for the market to match or exceed those same averages, but it does offer some optimism for investors over the next year despite recent volatility.

Additionally, several of our indicators are signaling that things have moved into washout territory in the near-term. The S&P 500 index funds group on the Asset Class Group Scores page displays an overbought/oversold (OBOS) reading of nearly -100%, marking the most oversold conditions for the market since the Tariff Tantrum. Meanwhile, the ten week for the S&P 500 (^TWSPX) recently moved to somewhat washed out territory below 20%. A reversal from ^TWSPX below 20% would be a potential sign that the market has put in a bottom, especially given the consistent long-term strength of domestic equities. Overall, a 5% to 10% decline is certainly uncomfortable, but it shouldn’t materially change our market outlook unless we see signs of further deterioration.

Daily Option Ideas for March 23, 2026