Hey trader,
Crypto cracked…Bonds cracked…Energy corrected from its highs...
Gold and silver are getting taken down right now.
Every bubble has burst except one- equities. The S&P 500 remains at overbought, overpriced levels while every other market has already repriced to reality.
That’s about to change real soon. Thankfully, I’m already positioned for the shift.
Once you read this article, you will be too. And not a moment too soon.
I lost millions of dollars fighting market cycles before I learned the lesson that changed everything…
You cannot fight the weekly MACD on the way down.
When the slope is down, algorithms are selling.
I have watched every asset class deflate over the past two years. Each one went through the same cycle of excess and correction.
I have been doing this for 39 years. Every one of those deflated asset classes had holders who said it would not happen to them.
The pattern that destroyed their positions is now aimed directly at your portfolio.
The Rotation Nobody Sees
I told my audience today that we are watching a sequential bubble rotation unfold in real time.
Crypto burst first. Energy corrected from its highs.
Bonds have been stuck in a long-term bear market. The Fed's three rate cuts accomplished nothing to reverse it.
Now gold and silver are being brought down. Each asset class had its moment of excess and each one corrected back to reality.
I call it a sequential rotation. The last man standing is equities, and the S&P 500 has not yet absorbed what every other market is already screaming.
The bond market is 10 times the size of the stock market by capitalization. I told members to think of it like a whale sitting next to a guppy.
Yesterday every asset class bounced at some point during the session. Bonds never bounced once the entire day.
When the bond market cannot rally, it puts a restraining order on the stock market.
The weekly MACD on the 30-year treasury has formed almost a triple top. If that formation rolls over, it drags equities straight down with it.
Here is the math working against longs right now:
- The 30-year treasury yields 4.7%, making bonds directly competitive with equities for institutional capital. When institutions can collect 5% risk-free, 99% of them will sell stocks to capture that yield.
- ISM manufacturing input prices just hit their highest level since 2022. Companies are laying off workers and cutting staff to hide the margin pressure that rising costs are creating behind the scenes.
- The Fed cannot cut rates with input prices breaking out. Rate relief is dead for the foreseeable future and the single biggest tailwind bulls were counting on is gone.
Do Not Substitute Liquidity for Intelligence
I said something on today's broadcast that every trader reading this needs to absorb. Do not substitute liquidity for intelligence.
The algorithms have been pumping and defending this market for months. Once that liquidity dries out and siphons away, it is like pushing off a cliff with no buyer's underneath.
The weekly MACD slope on the S&P 500 is pointing down. I teach Genesis COG members that the algorithms' secret sauce is simple.
They trade into slopes. The slope on equities has turned, and position traders buying this dip are buying directly into algorithmic selling pressure.
Brandon Chapman confirmed what I have been saying for weeks. Institutional signals have pointed to a 5 to 10% correction since November 28th.
The only remaining question is whether this becomes 10 to 20%.
I carry 50% cash, and I am hedged on every position. I am making money today while the last standing bubble begins to deflate around everyone else.
The Genesis COG System identified this sequential deterioration across asset classes before today's session confirmed it. You need to see which bubble is deflating next before it takes your account with it.
Professor Jeffrey Bierman
Creator of the Genesis COG System