The only and only bear market that’s been in existence in the Year of our Lord 2026 is volatility. In spite of a world which seems to have become completely detached from reality, fear has utterly left the building, and the VIX futures have inexorably stomped from the 40s to Epstein levels. I strongly suspect pre-election shenanigans account for most of the market’s strength, which is one of the reasons I am counting the days until the mid-terms, a mere four weeks from this very day.
This morning, the /ES has pushed its way past its former high. Thus, the S&P 500 has joined tech stocks in record high territory. I will try my best to mask my delight. Let’s just say that SPCX has been an unbeatable salve in this entire runup.
The reason the /ES matters is because new highs tend to feed more new highs, and this is a very clean breakout. The question at this point is whether it does indeed feed on itself, as the /NQ has done.
What’s so annoying about this market is the abundance of fake-outs. The SMH, for instance, was a slam-dunk, can’t-lose, ready-to-plunge sector when it broke down in late June. What happened afterward? Just the opposite! Failed support magically un-failed itself, and that red line resumed its role as support, propping up the SMH with every attempt at weakness. It, too, is clamoring back toward lifetime highs.
One asset which is slowly recovering is silver, shown below with the /SI chart. My hat is off to this one, since I’m a long-term precious metals bull. The majority of 2026 has absolutely stunk for precious metals, since they fully shot that wad in January, but as you well know, my long horizon view is that gold and silver are going to be the place to be.
One note of caution I would add for the bulls, now enjoying their 18th year of a virtually uninterrupted, debt-fueled bull market: take note of the trendline on the /NQ futures. Time and again, once it reaches this line, it reverses. Just sayin’.
As for the elections, I’ll make the same point I’ve been making all year long: the moment the election is over, the impetus to prop up the equity market absolutely vanishes.
Indeed, as I’ve already laid out at length, there’s actually a perverse advantage to harm the market under certain circumstances. There’s precious little reason to short anything until the votes are cast.
After that, though, you’re going to be in a very different environment.
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