Speaker A
16 days in a row. Wall Street doesn't do this very often, but when it does, you need to be paying attention. With a 9% decline peak to trough so far in the Russell 2000, why is it that the markets
Analysis of unusual market behavior in 2026, focusing on Russell 2000, AI bubble, bond risks, and macro trends shaping stocks and commodities.
Key Takeaways
- Unusual Russell 2000 behavior suggests potential market weakness despite near all-time highs.
- Tech stocks remain concentrated leaders while many other sectors show signs of stress.
- Bond market and debt refinancing risks could trigger broader market corrections.
- Investor behavior is mixed with simultaneous moves to cash and heavy market investments.
- Monitoring inflation, GDP, and capital expenditure trends is crucial to understanding market direction.
What the video covers
- The Russell 2000 has declined 9% peak to trough with 16 consecutive days of closing below its open, a rare streak last seen in 2018 near a market bottom.
- Despite weakness in many stocks, major tech stocks like AMD and the Magnificent 7 remain strong, concentrating market gains.
- AI bubble search trends have topped out following a hardware stock crash, signaling potential market cycle shifts.
- There is a growing concern about debt and bond market risks, especially for regional banks and zombie companies struggling to refinance.
- Investors are moving into cash-like assets, yet institutions remain heavily invested, creating a paradoxical market environment.
- Less than 50% of S&P 500 stocks trade above their 200-day moving average, indicating broad market weakness beneath headline highs.
- Capital expenditure is focused on data centers supporting AI, with inflation and GDP trends critical to avoiding stagflation.
- Charts comparing S&P valuations to money supply highlight potential tipping points reminiscent of past bubbles like the 2000 dot-com crash.
- Equity issuance is surging, largely driven by companies like SpaceX and Google, signaling corporate capital raising activity to watch.
- The video also discusses behavioral finance trends, market breadth indicators, and the importance of monitoring bond yields and credit conditions.
Chapters
- 00:00Market unusual streak and Russell 2000 decline
- 01:22AI bubble search trends and hardware stock crash
- 02:52Market breadth and S&P pullback signals
- 04:21Investor cash moves vs. market investments
- 05:37Subscription call and daily show intro
- 06:46Equity issuance and debt tracking insights
- 08:02Capital raising and midterm market outlook
- 09:24Tech sector strength and market risks overview
- 12:07Bond market signals and volatility indicators
- 19:00Summary of AI, bonds, and market breadth dynamics
Full Transcript — Download SRT & Markdown
Speaker A
are holding up so well? And could this chart be holding the key to whether we actually see a tipping point when it comes to bonds and risks in these markets? With Jim Kramer and many others coming out with all sorts of ideas over
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the last 24 hours, where are we in the cycle and what do we need to be paying attention to, including a potential here of acceleration in yields across the board? And of course, the movement in bonds. One of our favorite reads is now
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starting to say, "Yeah, there's some cracks starting to show." Is now the time that markets really bust or are they just going to hit new all-time highs? Join us as we go through stocks, commodities, and cryptos, breaking down
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what you need to know right now. We'll see you soon, guys. This will be a great one.
Speaker A
Well, welcome back to one of the largest daily shows on the planet. It's great to have you here. And today, we're discussing the latest in macro, Wall Street flows, and of course, a couple of sneaky transactions from the biggest
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traders and investors themselves. We'll start things off here though with breaking down some of the behavioral finance things that we've seen over the last 24 hours and some stats that I think might blow your mind. And first up, we have of course one of our Google
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trend searches that we do periodically, which is the AI bubble search. And you may have noticed that it looks to have topped out just as we saw, of course, the crash period in June and July for hardware stocks and semiconductors. Now,
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why is this important? Well, during a hardware phase cycle where basically markets are coming into a new technology, they tend to rally and they rally big and we've already seen this and witnessed it in history so far. At
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the same point though, when people think that there's a bubble, then usually markets aren't able to actually top out.
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That is that markets often go on to make new all-time highs. And we saw this happen in 2025 when we talked about it and we saw the resurgence of, of course, hardware stocks. Now, at this point, you've got to remember even though
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hardware AI bubble searches are coming off, we've also got many tech stocks still hitting all-time highs. AMD, Magnificent 7, it's just become more concentrated into just a few names. So, what's giving right now? How is this market staying up while everything seems
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to be in the news saying everything's weak? Well, Blue Kurdic Market Insights over on X has gone through and really broken down something I think is important, which is the last 16 consecutive days. Now the Russell 2000 has been actually closing below. So that
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basically means it's opening and then it's turning negative below its open. Now this is pretty unusual. The last time we saw this was actually back in 2018 and it just so happened to be near the bottom of a market. You're going to
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hear this a bit today because there are so many breadth reads that are starting to get to extreme lows that they're synonymous generally with a 7 to even 10% pullback in the S&P. Now, you've got to remember at the time of this
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recording, we're like 1 to 2% away from all-time peaks. So, it's a very different market, very strange in some ways and has people showing similarities to, of course, GFC, 1970s, all these types of periods. But this is a streak
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that yeah, it's pretty unusual and it's now trending of course all over the internet. Now, why is it important?
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Well, of course, if the Russell is failing, then it's suggesting that we've got a weakness in debt. So that is basically that as yields go up companies in KRE of which there is a large dark pool today. So we'll talk about that.
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That's regional banks, banks in general and really biotechs and pretty much any zombie businesses as well. They struggle to recapitalize their debts which they're having to do here in 2026 into 27. And this has got many people worried. And of course, people are
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jumping on the bandwagon of getting cash flows into money market cash-like ETFs. According to macrocharts.com and at macrocharts over on X basically shows that we've recently seen a resurfacing of people moving into cash-like assets.
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And when this happens, there's always a counterintuitive or counter kind of play to it, which is that you want to look at whether institutions are cashed up or they're in the markets. Now, here's where the flip side happens. They're
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actually still invested and they're invested pretty hard. So, it's a really weird kind of case here in 2026 where people are running for cash because there's a lot of cash out there anyway. People are also really invested in markets and
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at the same time we've got a weakness in a huge amount of the S&P 500 stocks.
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Less than 50% of stocks are trading above their 200-day moving average. And of course, Paul Tudor Jones has that famous quote, nothing good happens below the 200-day moving average. So, it's basically saying half of the
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market's really weak. A whole bunch of the market is actually pretty weak. But of course, AI and 41% of the market are AI tech stocks are still pretty strong.
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Why capex spend? It's all about data centers. And really, at the moment, you kind of almost need inflation to stay up and you need a boom to stay up because if the GDP kind of starts to weaken, then we could begin for the dreaded
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stagflation. But at the moment, we're squarely here. So, it's kind of like this point where energy markets might still need to go up and we're also getting AI stocks going up at the same time. If one of those weakens out, it
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actually could be a sign that things are worse than you think. So, you almost want both of them to keep going up at the same time or at least to stagnate then rally then stagnate then rally. It is a strange time in 2026. If you enjoy
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this type of stuff, remember to subscribe as well and smash that bell icon. We do this every day together.
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Let's have a look at this chart here from BarChart at BarChart over on X guys if you want to give them a follow and check this one out. And basically it's just the S&P versus M2. Now we've
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shown this chart before but I thought I'd give credit here to the guys that have put it out recently. And the reason they're putting it out is of course look where we are. We're at points that we haven't seen since of
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course the 2000 dot-com bubble. Now this one's going to I'm sure become trending and everyone's going to talk about it. This is not necessarily, at least in my opinion, the chart that really tops out of market, but it's
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still interesting to see here that if you take a look at asset class, you look at the overall valuation to the money in the system, then you're getting towards, of course, yes, a tipping point period.
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And it all just stacks upon itself. But it's not the first time you'll see charts like this. It's also not the last time. And the reason I say some of these things is because look at this chart here from Carson and at Ryan Dietrich.
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And he puts it together very well. Ryan's excellent. And he basically says here, equity supply is surging as net issuance turns positive. And you can see here also, by the way, there's some credit to this handle down here. So go
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go check them out as well. But basically, it looks like there's a huge amount of issuance. Now, I always track debt. You track debt. We know why we track debt. It's a huge component to growth in the economy. And last time we
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saw issuance like this, remember these CEOs, these guys, they know what they're doing. They know when to go raise the capital. Well, when they're doing it, you need to be paying attention. Now, it turns out that this issuance comes from
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basically two businesses, SpaceX and Google. We talked about in the previous one, I think 88% of the overall issuance here is from those two companies. But it does just go to show still, I think, a
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saw an opportunity. They know probably more than we do. They probably have more information and they just a few basically a quarter ago went in and said, "You know what? I'm pretty excited about getting some de giant bonds.
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Remember, they were getting hundred-year bonds as well, some of those guys. And we saw similar things in the government side, that is the Treasury side and the central bank side just before really bonds topped out. They went on for
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months, I think about a year after this, but we had 100red-year bonds in the Swiss central bank and everything else.
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So, when this happens, you got to be paying attention. They don't they're not stupid. They're going for debt at the same time. So yes, it's all basically two businesses and a few others, but remember we've also got private equity.
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We've also got a whole bunch of other areas around that have been raising now especially hard in the last 6 months to one year. Something to watch. Next 10 months returns from the end of September in midterms. Now you might think October
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is going to be horrible. It could be. It's a bit of a weird one because of course it's a second cycle, presidential cycle here. So what tends to happen is these kind of things. Now if you have a
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look there can be a bit of kangaroo coming into the overall election itself and then often markets actually stabilize and rally and there will be some stats that you'll see going around this one here from blue kurdic and many
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others that are actually going to be pretty positive post election. I do think that's worthwhile considering these things. Obviously, you have got to take it a little bit with a grain of salt because 2026 is a little bit
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different, especially since I think June, July when we saw semiconductors kind of top out for now. And unless they're making new all-time highs, it's going to be very difficult for the markets to really rally hard. Remember, tech, tech, tech such an important
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component of the US markets. Have a look here at the data stats surrounding advanced decline lines. A lot of people worried about breadth. Obviously, the stats there aren't really necessarily saying it's horrendous. I always see breadth as a potential opportunity
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depending on where you are in the cycle. And with this many stocks down, I mean, as I said, usually you'd be down 7 to 10%. So yeah, I mean, it's a it's a strange one, but we always look at the
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price action. At the moment, we're in what we call a pit. This one here from Polycarp Research, I retweeted it over on X if you want to check it out.
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Basically shows here the financial cracks. Now, we've been talking about this for a while. I wrote a newsletter on about a month and a bit ago. We saw it ages ago and that was that financials and KRE looked horrible and so far
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they've been kind of tipping over. Now a lot of people see this and synonymize will kind of set it up for it's the beginning of the end. We saw it happen before the GFC. We saw it happen before
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2022 and of course we even saw it happen before tariffs. Now it's something to keep in the back of your pocket. Keep it in the back of your mind. If financials keep going bad then that can be a pretty
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big sign. But we did get a monster transaction coming in according to volumeleaders.com and on X that we just saw the seventh largest transaction ever recorded on KRE. Now is this a big deal? Well, it's happening at what we would usually call
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level of demand. Of course, the market has dropped off at the side of a cliff and the last big transaction we ended up getting further sells. So, this is a critical point here for banks and I think most people, most retail traders,
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investors, people like you and I, we're not looking at it enough. We're not paying enough attention to this subsection because really if they're not lending then we've got problems. Debt is a huge creator. The Q's meanwhile tons of cluster trades coming in. Obviously
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no extreme weakness in the Q's yet. This is the market to watch over the next coming months. If we lose the Q's well 41% of the market is basically tech. So everything else is pretty bad other than maybe energy and couple of healthcare
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biotech areas. So yeah it's going to be super important. Let's have a look at the last kind of session. We saw gold and utilities pick back up off basically falling through a massive floor. And if we actually look at the month to date,
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as we've been talking about for the last two weeks, semiconductors, tech, communications, healthcare, bio really the only good sectors. And look, health energy has been pretty good. It's only down 3%. Obviously, it's been running super hard in June, July, August. So
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yeah, it really just has been a tale of a couple of sectors in markets. And it comes back to what we talk about all the time, which is it's stock selection and sector selection in later cycle periods.
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Now, speaking of later cycle, have a look at this chart here from Duality Research over on X. Basically, it's just going through the standardized cycle.
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Now, if you know your your stats on kind of market runs, generally speaking, around 100 to 115%ish, which is where we are right now, is kind of the average of a good bull run in markets. That is that
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markets rally. They rally for a couple of years. Usually, you get to around 3 and 1/2 years and blur, they kind of go bad. Now, this one's gone past that.
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We're now on the fourth year, and we roughly last usually 5.5 years. We've shared this several times over over a decent period. It comes from Ryan Detri, comes from us. We've also looked at it.
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Duality here, of course. It's it's well known through I guess people that have studied these structural cycles. And we love structure. You know, structure is a super key. Understanding averages. I I feel very comfortable with averages. I love a good average. I'm sure you guys
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do, too. But we don't have too many data points. Actually, a lot of them really do weaken out about 3 three and a half years in. So, we've only got a couple, but on average around five and a half
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years. So, if that's going to happen, then we have a potentially another one and a half years left in this market before it really hits the fan. Again, take it with a grain of salt, but interesting stats. Now, every time
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Bitcoin goes up, guys, what does everyone do? They jump into altcoins. You will have seen quite a bit of alt froth recently. Now, Glass Node's gone through and kind of found that this is periods where often Bitcoin will will
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stabilize and everyone will jump into alts. Some alts have been doing well. Actually, some great technical charts there uh in terms of overall cryptos at the moment. But yeah, interesting times.
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Now, open interest versus BTC price. Here we have a chart and you can see that actually according to glass node, not many people seem to be kind of opening with leverage. So, it's actually a less levered version of the markets
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rallying at this stage. So, of course, if leverage comes back in, well, then things could get pretty crazy pretty fast. And I think that's because when you turn a market, often people don't feel comfortable. Remember, leverage in both the good and the bad way is often a
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sign of people getting confident. And that's why we follow leverage so much in the stock market every month because guys, we've got record leverage. So that means people are pretty confident in stocks and crypto turns out not as
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confident. Bitcoin ETF flows very positive I think over the last kind of week, week and a half. And again, this solidifies that at least there was real money behind this movement. And that's really important. Remember, we talk about price action, we talk about data,
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we talk about flows. Well, this shows us that flows were there. They were positive. And at least for now, it seems like plenty of people have been involved in this rally. So, that's a good sign to hopefully keep it up. Now, just
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reminder, if you haven't already signed up to our newsletter, if you're new here, make sure to do so. Had over 17 years plus experience in markets. I share both the institutional side and the retail side in these newsletters.
Speaker A
One chart, one story, one market lesson links in the description and pin comment down below, guys. Be great to see you there. All right, let's now jump into some of the charts that are looking good, some that are looking not so good.
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First up, S&P versus kind of the lowvol. Now, in general, if you're seeing this chart going up, not a bad sign uh generally for markets. So, if we have a look here and we overlay the cues for a
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second, you might notice that yeah, it's not a bad sign that it's made new high.
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And these kind of track pretty well together. So, at the moment, this is actually making new high and the cues haven't quite done so. So, it's kind of showing us that in general, there seems to be a slight risk on in markets.
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Again, it's only in the tech stocks. The tech stocks, the tech stocks. If they weren't there, the market itself would look pretty bad. You know this because New York Stock Exchange, look at the advanced decline line. It continues to
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go down. It's actually worse breadth on the daily pretty much all the time. And the percentage of S&P 500 stocks is still under 30. So we've got a really weakened market. Now this chart here from Heisenberg and a few others over on
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X uh was pretty interesting. It was basically showing us I think something that we talked about in the last video and if you missed it, just wanted to kind of reiterate it. This is the US 10ear. This is McDonald's. looks like a
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K because it kind of represents the K shape. I've never seen a representation of a chart that looks right down to the theory. It's literally the theory written in a chart. So, what's it telling us? People are struggling, guys.
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It's pretty brutal out there. I'm sure you're witnessing this. Maybe some of you are feeling it as well. It's um yeah, it's pretty rough. So, something eventually will break, but at the moment, you're looking for those signs.
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And of course, one of the ways that we look at this is often looking at bonds.
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Now, there's no doubt that one of my favorite reads, the old BO for high yield spread, that's broken up. The move index has broken up as well. Now, when this has happened, it's been synonymous usually with a pullback occurring and
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losing structure on the cues. But remember, the number one principle, price action. Have the Q's lost their levels yet? We'll take a look at it in a moment. But another chart that I thought was really interesting here when we're
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talking about breadth is the equal weighted market versus the S&P. We're back at levels. And I'll just quickly load up the S&P here so you can see you can get a bit of a point that usually are synonymous more with either topping
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parts of the market or possibly uh consolidation periods. So you know look at this the RSP again we ground higher had a big pullback we ground had a little pullback and now we're back at this level and we're still grinding. So
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really the markets are kind of signaling, yeah, we're just rotating underneath the hood, but when you're at RSP levels like this, it it's it's really strange because when it actually is bounced up, what's actually been happening is the market itself has often
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been declining or going sideways. So the rotation is going to be key here. And again, watching tech is super super important. The overall defensiveness of the markets doesn't seem to be there at this stage. Utilities staples not going
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up. You can make arguments why that is. The bonds market again starting to show some signs of risk. The other market that everyone looks at at these points is of course move and the move is rallying. So this basically is showing
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us that there is volatility inside of bonds. If you've ever looked at triple C bonds, they're pretty nasty ones. Hard to chart actually um without proper different software. But basically, they're kind of showing real signs of concern and stress, which is why we're
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seeing some IWM stocks not doing so well. But at the same time, the biggest guys, they're not freaking out just yet.
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It's just the beginning. But yeah, look, if you're a bonds watcher, this is the most risk we've seen literally since a pullback that was 7 to 10% back in March. So, coming into this midterm election year, yeah, bonds are moving.
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They're actually moving. We we've said consistently now for weeks and weeks and weeks, nothing's happening. Nothing's happening. Nothing's happening. Well, if you're a believer in the bonds market being a predictor, something is happening. Just price hasn't really done
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anything in the stocks yet. That's not unusual for happens, but yeah, something is happening. Treasuries, of course, falling off as yields go up. No real surprise there. But here are some of the things in the tech world that haven't
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happened. Korean markets, they haven't made new highs. Semiconductors, meanwhile, they have a little bit, but still struggling. And it's become a techspecific market. So, have a look here. XLK still series of higher highs and higher lows. That's a good sign for
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the bulls. Magnificent 7 still holding above all-time highs. Again, that's an okay sign for the bulls. The bulls are going to like those types of reads because the tech sector is so important.
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You can see here the semis, even with the recent little bit of selloff this week. They rallied straight back up, made new high. So, specific semiconductors, specific tech stocks, they've been moving and they've been moving pretty hard. So, of course, the
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ones that have been in the news, the likes of the AMDs and stuff, they rallied. They're now consolidating because, of course, everyone already went ballistic on them. But generally speaking, it's been a stock selection market inside of tech. Copper,
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meanwhile, let's take a look at the metals here. It's still holding up. It still had the all-time high weekly close on it. So, it's still an okay market for now. And that's a good sign. And we saw here the movement in GLD actually held
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those put support levels. So you can kind of witness here that so far gold is holding the puts, but there's not much technicality there. It's really just a kind of maybe relief rally after falling this week. Speaking of gold, you can see
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the slight relief. Certain levels such as this 20 on the 4hour could cause some resistance. For gold to really recover, guys, it's going to need to take out these levels. 4,400, you know, at the moment maybe 4310 or something like
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that, but still pretty weak. Silver similar just kind of floating around this little level that it's reached in the lows kind of in limbo land and US oil has gone back down to test the lows again. Could it be a double bottom?
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Of course. Could it be further falling into the election? You know, these these types of things uh can happen. Who knows? The main thing with oil is that you're watching probably things like energy stocks in particular and crack.
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And that's because if energy stocks lose some of their key levels, and you'll see here that they lost it and then kind of bounce back up after after the end of the session, these zones here are potential turning. You've got highs,
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you've got lows, you've got higher highs. It's been a very strong trend so far. The daily 50 has been pretty good.
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So again, energy critical point, critical support. Lot of actual stuff at work here. And you don't really want energy. I know you want energy to drop.
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of course we all do but at the same time it kind of could also be telling us that ultimately the capex spend is weakening as well so the markets are smart they think 18 months in the future so I
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actually think energy and capex spend have to kind of go almost hand in hand at some point here and you could say yeah but Tom the geopolitical stuff that's where all the problems come yeah but there's also copper and there's
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there's all these things going on this it's a powerful forces at work guys here in the markets crack had the number one transaction it's fallen a little bit since then we'll watch structure And of course, markets remain pinned by the
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calls and the puts. The Q's are pinned between two tight levels, basically doing a little pullback in time at resistance, not necessarily a negative signal, and the S&P slamming into those puts and holding for now. So, these levels here, we're witnessing basically
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the options market kind of holding it up as the structure also holds at around this uh this put level of 7660. Who knows why it's that level, but it it just seems to be finding it. IBIT, meanwhile, Bitcoin holding really again
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pinned by two really tight kind of put and call positions, but it's holding up really well. Flows are looking pretty good. And we've got a little alert here just above 85 because we've got a low, we got a high, got a lower low. Do we
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get a higher high? Are we hitting 81k demand zone? You know, this is kind of what the market's saying at the moment.
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But if it bucks it and goes like this, then all of a sudden we could be in for a nice little rally. What an interesting time in markets, guys, and a fascinating time to be, of course, in everything in
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terms of these global kind of issues and markets in general. It is one of those points where I think abundance comes into it. We talk about on the channel all the time, one chart, one story, one market lesson. Got a new one coming this
Speaker A
week. So, make sure to sign up. Links in the description down below for the newsletter. But to summarize the market itself, terrible breadth, usually 7 to 10% decline, certainly strange, but tech is holding up. And because AI and capex
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spend are such an important part of this market, how can it fall when AI remains higher highs, higher lows. If that changes, well, we'll be the first one to talk about it. But there's no doubt that bonds have set a small alarm, not a
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freakish alarm, but certainly a small alarm into the markets. The bow for high yield, the move index, synonymous usually with a price action declining market. Nothing's happened yet. Let's see what happens next in one of the greatest stories ever told. And that's
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of course what we're looking at these markets. Bye for now, guys.
Topics:Russell 2000market analysis 2026AI bubblebond market riskstock market trendsWall Street flowsdebt issuancetech stocksmacro financeinvestor behavior
