You've seen me break down markets into the major indices, but you've never seen bifurcation like this (in the charts). This is historic!
Some say the market isn't an indicator or the real economy, and sometimes that's definitely true, but that also seems short-sighted to me. Take a look at the $SOX for instance -which has led the entire April rally, along with a handful of big tech names. The fast money chasing these stocks doesn't care about the real economy. These trades originate in Asia, where 75% of these chips are made, and a lot of the wild speculation going on over there is no-doubt spilling into US markets. Same thing happened as China ramped up their Gold buying, the rising tide helped lift the entire ship.
An even better example is the rally in the German $DAX - straight through a recession, and that market continues to run on fumes even as a second recession looms.
Germany's downturn lifts unemployment to 15-year high as industry cuts jobs
"record 3 million jobless underscores Germany's stalled recovery as core industries retrench" (chosenbiz.com/ many sources - full article)
Germany is actually trading more in line with reality than US markets:
That was the closing bell on another shitty trading day (3rd in a row); in case you missed it. If not for last month's mag7/AI pump job, we'd be trading more in line with Gemany. German $DAX #AI 👇🔥🐩💩 pic.twitter.com/LbFf9DRJlo
— Veteran Market Timer (@3Xtraders) May 19, 2026
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| $SPY DCS Chart |
Think of the Tech heavy $SPX & $SPY - as the trees. This is the index most investors remain lazar focused on, as an endless bull parade continues to try to sell the L shaped recovery narrative. Translation: the lower 90% can be rationalized away. Yesterday's earnings report from Walmart seemed to blow a massive hole in the side of that now sinking ship.
The most glaring thing about the $SPY chart is the massive gap that was left behind in early April, and the declining volume. Volume often precedes market direction, and I'll bet that gap fills over the summer.
$NYSE - New York Stock Exchange - better diversified... - think of this as the forest - those who are wildly chasing AI momentum (tech stocks mostly) can't see the big picture. A much better indicator of the broader market, than the tech heavy $SPX. 2026 highs in the rear view. It rallied 2 weeks in April, before stalling out. Ever since... it continues to chop around in a range.
Anyone with a pulse can see the market treading water again, and what is the first thing the smoke and mirrors media points to? "The Dow made new all time highs". It's no wonder they need to play sound effects to keep the viewers' attention. Thankfully I have a DVR, so I can just record most of it, and scan-ahead. Delete.
$INDU (Dow Jones Industrial Average) - who trades this dead index? Nobody. Doesn't matter — The talking heads keep flogging, "the new industrial revolution", narrative, and the sheep are eating it up. Industrial revolution? Where are the industries? Where are the jobs? Every headline is another round of layoffs. The only things being built are data centers — and even those are being built by robots, for robots.
Everybody already has AI in their pocket. It's as mainstream as the internet was in 1999 — which is exactly the problem. We've seen this movie. Different ticker symbols, same plot. The bubble just needed a new name.
Call it what it is: a tech retread. 1999 with better graphics. 👇
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| Dow Jones DCS Chart |
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