Markets proceed to push greater, fueled by momentum, optimism, and the explosive narrative round AI. On the floor, all the things appears to be like robust. However once I step again and analyze the broader panorama, I see a really totally different image rising beneath the floor. This sort of setting usually resembles what I name a melt-up, the place costs speed up greater not as a result of threat is low however as a result of capital is chasing efficiency late within the cycle.
What considerations me most proper now just isn’t equities, however what’s occurring within the bond market, currencies, and commodities. These areas usually transfer forward of main shifts, and they’re beginning to sign rising stress that many buyers are overlooking. If rates of interest proceed to rise towards excessive ranges, this might create stress that ripples throughout all asset lessons. That is a type of moments the place understanding intermarket relationships turns into essential, not simply watching inventory costs in isolation.
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Chris Vermeulen
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TheTechnicalTraders.com
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