The financial system is issuing warnings… but few are listening.
Much of the stock market rally has been driven by a $USD collapse. This is the famed “debasement trade” through which capital flees fiat because the latter is rapidly losing purchasing power.
The $USD lost 12% during the first half of 2025. However, since that time, it’s been consolidating. Put simply the bull market is losing one of its largest drivers.
Short-term Treasuries are also flashing “danger.”
The yield on the 2-year U.S. Treasury is on the ledge of a massive cliff. When this line finally breaks, yields will tumble rapidly. When yields fall, it’s because prices are rising. And the only context in which bonds would rise given the U.S.’s massive deficit (the U.S. is currently running recessionary levels of spending despite the economy still growing), this suggests a MAJOR “flight to safety” trade is coming.
Finally, and perhaps most importantly, the market leaders are breaking down.
The MAG-7/ Big Tech plays have been THE primary drivers of the bull market begun end of 2023. Since that time, they have accounted for 75% of stock market gains and 80% of S&P 500 profits. Put simply, remove the impact of the MAG-7 from this bull market… and the bull market NEVER happened.
I bring all of this up because the MAG-7 are forming the EXACT same formation they carved out right before the tariff-tantrum/ market crash of early 2025. As I write this, they have just broken down out of a multi-month consolidation period.
You’ve been warned.
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