Caruso Weekend Report: October 12, 2025

Weekend Report

This past week was one of extremes. Action shifted from early-week complacency to end-of-week panic. Trump’s China tariff threat had an outsized market impact, as overly bullish positioning triggered a global selloff.

Ahead of the break, the VIX had been signalling for days that the equity market had grown too complacent. The VIX and S&P 500 typically trade in opposite directions. When they both climb for multiple days, it signals that option markets are pricing in risk not yet appreciated by stock investors. I recently released a video explaining how this works and how it has helped me remain bullish while positioning for days like Friday. https://youtu.be/Ktza8PxCczI?si=PntgfCv_QicIxM27

Some might view the Nasdaq’s weakness as a single down day, but a look at the equal-weight QQQ and the percentage of stocks above their respective 50-day averages reveals far broader damage. The weakness had only been masked by the very powerful AI bull market.

The selloff was sharp and pushed our FOMO indicator into the FEAR zone at 15%. It’s likely stocks open lower on Monday unless we see positive comments from Trump over the weekend. A gap lower could push FEAR into rare single-digit territory — conditions that often create short-term buying opportunities.

The best opportunities tend to be in stocks that remain resilient during market weakness. Despite markets closing lower across the board in panic, AMD, ORCL, CLS, and VRT all finished the week higher. Not only are they spearheading a technological revolution, but their main markets lie outside of China — and their near-vertical rises have left many investors underexposed to the only major theme still showing consistent strength. Their resilience continues to be my focus heading into next week.