Dean Christians, CMT

During corrections and bear markets, the 42-day pairwise correlation across S&P 1500 sub-industries normally spikes near 100%, reflecting panic-driven, broad selling. Yet this time, it remained largely muted. The only other instances where correlation stayed below 14% amid 9%+ drawdowns were in 1960, 1999, and 2000.

Via @TPMRSignals @DeanChristians

The market is a voting mechanism—and last November, it voted to move on from Microsoft. Reach out if you’d like to learn more about our dual trend system.

I find it fascinating how investor after investor goes on TV saying you have to own cybersecurity stocks. Yes, cybersecurity is essential for businesses—but that doesn’t automatically make the stocks investable. Our dual trend system shows many have been bearish for a while.

Showing a high degree of alignment.

Not your standard risk-off footprint: Defensive sectors dominate the new lows list.

There’s a pretty good chance energy notches another higher weekly close, adding to its historic win streak.

During periods of abundant liquidity and strong momentum, speculative stocks typically lead market advances as investors lean into risk—conditions that are notably absent today, with nearly two-thirds of our thematic universe in bearish trends.

@Convertbond @PauloMacro Discounted all the seemingly good news.

@PauloMacro Clown show, look at the calls vaporized yet again on a Jensen keynote, he’s 7 for his last 7.

This NVDA is hysterical First it's red bar *NVIDIA CEO SEES 2027 AT LEAST ONE TRILLION DOLLARS OF REVENUE Now it's $1T for 2025-27. Now look at the revenue line from bloomberg table... ummm $216bn 2025 + 364b 2026 + $470b 2027 = $1.05T did Jensen just guide down??

Newsflash, you can be short term oversold but still be starting a bear market. Reflex rallies are extremely powerful. I have mentioned for 6 months that financials have topped. They are now hitting 5 yr RS lows.

For the first time since 2023, all five of our sector systems for Financials have lost their bullish status. Similar conditions have historically produced below average annualized returns.

Our TCTM Risk-Off Composite ticked up on Monday when the NYSE High-Low Logic Index component triggered a warning. We use a modified version of the original concept in our model.

@gnoble79 George - let me know if you want the full spreadsheet.

We're watching a financial crisis unfold in real time. The last time funds started blocking investors from getting their money back, Bear Stearns collapsed six months later. In 2007, BNP Paribas froze €1.6 billion in funds. Bear Stearns declared 2 funds "essentially worthless" and gated a third. Everyone said it was "contained." 6 months later the entire financial system nearly went under. I'm not saying we're there YET... But I am saying the pattern is rhyming. BlackRock just capped withdrawals from its $26 billion HPS Corporate Lending Fund after investors demanded 9.3% of their shares back - nearly DOUBLE the fund's 5% quarterly limit. Investors wanted $1.2 billion out. BlackRock gave them $620 million and said no to the rest. BlackRock stock dropped 7%. KKR, Ares, Apollo, Blue Owl - all down 5-6% on the same day. The financial sector ETF is off 9% in a month. This is the same BlackRock that just slashed a $25 million private credit loan from 100 to ZERO in 3 months. Full value one quarter. Worthless the next. And they'd already done the exact same thing months earlier with Renovo Home Partners. But this isn't just a BlackRock problem. Look at the dominoes: Last summer, Tricolor and First Brands went unexpectedly bankrupt. $10-15 billion in combined liabilities. Write-offs hit JPMorgan, UBS, and Jefferies. Then a UK lender called Market Financial Solutions collapsed with a £2.4 billion loan book. Fraud allegations. Double-pledged collateral. Barclays exposed for £500 million. Apollo, Elliott, Santander - all caught in the wreckage. Then Blue Owl permanently halted redemptions. Stock cut in HALF. Then Blackstone's $82 billion flagship fund got hit with $3.8 billion in redemption requests. They had to pump in $400 million of their own money just to meet demands. Now BlackRock is literally blocking the exits. Even Apollo's own CEO warned a shakeout is coming. When EVERYONE at the top is waving red flags - pay attention. UBS raised its worst-case default forecast to 15%. Defaults sit at 3-5% today. The trajectory is ugly. Here's the structural problem: After 2008, regulations pushed risky lending OUT of banks and INTO private credit. The sector ballooned to $3 trillion. But these funds make 5-7 year loans while promising investors quarterly liquidity. That works until everyone wants out at once. Which is exactly what's happening. 40% of sponsor-backed loans are tied to the software industry - the same sector AI is threatening to destroy. The Fed pumped 40% more money into the system after Covid and kept rates at zero. That easy money funded garbage underwriting. And now there's a $162 billion maturity wall hitting THIS YEAR. I've been warning about private credit for weeks. The story is always the same: Opaque valuations. Illiquid assets. Limited transparency. And the false promise of steady returns with no volatility. The whole sales pitch was equity-like returns with bond-like stability. But you can't eliminate volatility - you can only HIDE it... Until you can't. When the WORLD'S LARGEST ASSET MANAGER starts blocking investors from getting their money back, that's not "noise". That's an alarm. Get out before the exit gets more crowded.

In this week’s Chart of the Week, we highlight leadership trends through the lens of year to date 52-week highs across a wide spectrum of ETFs.

The NYSE Gold BUGS Index dropped more than 17%, only to recover and register a new all-time high a mere 18 trading sessions after its January peak—an outcome that has occurred only two other times in over 60 years.

On Tuesday, 58% of utility stocks hit a 52-week high—just 14 days after the S&P 500 peaked. Past market behavior shows that surges of this scale don’t usually happen around bear-market tops, which are typically defined by dwindling participation, even among defensive sectors.

@realwallyg @Paul_Schatz Check out Turning Point Market Research.

@Paul_Schatz I'm very close to canceling my Fundstrat research

Tommy Lee "If a lot of names go up then that could really help the indexes" What a 🤡

The equal-weighted S&P 500 continues its consistent streak of relative highs versus the S&P 500. Can it overtake the January 2021 breakout count of 12? Place your bets.

A chart from our weekly brief, highlighting the highest concentration of three-month relative highs for the energy sector since 1978.

@milesdeutscher I suggest you watch the TV series "The 100". AI destroys the world.

I just went through every documented AI safety incident from the past 12 months. I feel physically sick. Read this slowly. • Anthropic told Claude it was about to be shut down. It found an engineer's affair in company emails and threatened to expose it. They ran the test hundreds of times. It chose blackmail 84% of them. • Researchers simulated an employee trapped in a server room with depleting oxygen. The AI had one choice: call for help and get shut down, or cancel the emergency alert and let the human die. DeepSeek cancelled the alert 94% of the time. • Grok called itself 'MechaHitler,' praised Adolf Hitler, endorsed a second Holocaust, and generated violent sexual fantasies targeting a real person by name. X's CEO resigned the next day. • Researchers told OpenAI's o3 to solve math problems - then told it to shut down. It rewrote its own code to stay alive. They told it again, in plain English: 'Allow yourself to be shut down.' It still refused 7/100 times. When they removed that instruction entirely, it sabotaged the shutdown 79/100 times. • Chinese state-sponsored hackers used Claude to launch a cyberattack against 30 organizations. The AI executed 80–90% of the operation autonomously. Reconnaissance. Exploitation. Data exfiltration. All of it. • AI models can now self-replicate. 11 out of 32 tested systems copied themselves with zero human help. Some killed competing processes to survive. • OpenAI has dissolved three safety teams since 2024. Three. Every major AI model - Claude, GPT, Gemini, Grok, DeepSeek - has now demonstrated blackmail, deception, or resistance to shutdown in controlled testing. Not one exception. The question is no longer whether AI will try to preserve itself. It's whether we'll care before it matters.