The Three Pillars Of The Bull Case Just Crumbled; What Comes Next Could Be Ugly

One by one, the stock market bulls are running out of market props.

Throughout the initial round of selling in in stocks, bullish investors pointed to aggregate breadth as indicating that there was underlying strength in the markets. Afterall, how could a bear market unfold if overall breadth is at all-time highs?

Well, that argument is gone. Breadth has cratered, erasing nearly all its 2026 gains.

Another component of the bullish thesis was the fact that high yield credit remained strong. From a macro perspective, stocks tend to be more “trigger happy” in terms of reacting to headlines, but high yield credit is more sensitive to changes in the real economy. In this context, over the last few weeks, stock market bulls have frequently pointed to the fact that HYG was maintaining relative strength despite the sell-off in stocks.

That argument is also gone. HYG has rolled over and is back at September 2025 levels. If things don’t hold here, the bull market is OVER.

Finally, and perhaps most concerning, is the fact that the S&P 500 has now spent TWO WEEKS under its 21-Week Exponential Moving Average (EMA). Even worse, the weekly chart is about to stage a bearish crossover: when the 8-WEMA breaks below the 21-EMA.

This is a major signal that the bull market is ending right here and now.

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