The Market Breakout That Wasn't – History Rhymes (Again)

After the October blow-off top in the Mag 7, markets are still pretending everything’s fine. This is year-end window-dressing season — the only real selling we’re likely to see is tax-loss harvesting and the occasional 5-million-share fat-finger in GDX.

  

St. Anton, Austria (worldatlas.com)

Most pro bears are still sipping glühwein in Zermatt and Courchevel…but the smarter-than-average ones flew home a day early, cranked the cold-water spigot wide open, and spent Monday hosing down energy bulls while the rest of the market pretended not to notice. 

 

After weeks of holiday muzak on the terminals, someone finally swapped the playlist for the Grinch theme. 

 

• Perma-bear Ray Dalio on CNBC  

  

• Julian Emanuel on Fast Money: “Yes Guy, we can absolutely get a 5-10 % pullback with two holidays coming" Wha? 

 

• $VIX stealthily rose 8 % while natural gas and the entire energy patch got taken out back and beaten with a stick. And Netflix shareholders? They woke up to discover the Warner deal they were front-running just got torched by a hostile Paramount bid. Funny how that works. But don't sweat it Morgan Stanley CEO Mike Wilson has the perfect antidote— hot cocoa: 

Candy Coated Economic Theater for the Masses™ 

Courchevel 1850 https://booking.courchevel.com/

 Dan Nathan (Fast Money Dec 4 episode) highlighted transports and financials smashing “all-time highs” as proof of real-economy strength and healthy rotation away from megacap tech.  

 

If you've been around markets long enough, you've seen this pattern play out before, and you already know how the story ends. 

 

"Transports and Financials trading at all time highs". Total fabrication @CNBC pic.twitter.com/768firAVSA

— Veteran Market Timer (@3Xtraders) December 4, 2025

I couldn't believe what I was hearing, but after tracking down a free listen (podcast) I had Grok/AI listen to the entire show, and provide me with a free transcript in like 1 split sec. - life is good! 🤣    

In it (the script): Morgan Stanley CEO Mike Wilson echoes the same ol’ " rally is broadening" theory, pushing the idea that recent weakness we're seeing is just a healthy pause and that we're finally seeing real earnings-driven broadening—median stock growth the best in years. Sound familiar? It should. 

Ever since the '08 crash, most "broadening" phases have been short-lived rotations or outright head fakes late in the cycle.

When banks and cyclical suddenly "lead," it's often because the easy money has already been made in growth/tech and the market's looking for the next story to keep the party going. 

Fast-forward to this week (December 2025), and we're hearing eerily similar chatter. 

In truth last time we saw anything close to a broadening out of the economy was the mid-to-late 1990s—strong economy, firing on all cylinders, was the irrationally exuberant dot-com mania that blew up in 2000, which led to a housing boom- fueled by easy money, and deregulation, similar to what were seeing fuel today's FOMO trade, except that this Covid fueled liquidity bubble is getting long in the tooth. Housing topped out years ago, along with everything else, including Warner bros.

Take Care, AA  

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