The first quarter of the year of our Lord 2026 was marvelous. Absolutely marvelous. It didn’t take a war at all. The first two months were just dandy without it, thanks so much for asking. A classic series of cascading lower lows and lower highs. My kind of market.
The most subtle changes began on March 31st, and for the first few days of April. It was manageable, however. That is, until April 7th, highlighted below. April 7th wrecked everything.
On the whole, April was an absolute grind-fest which mashed bears into hamburger. Worse yet, April’s passing didn’t change things. The morning of May 1st started off green, and then it began to feed on itself, hyper accelerating during the first trading hour, pushing the futures to 7300 (a 1,000-point rise in a matter of weeks). The gentlest word I can assign to this event would be dispiriting.
The net result being a magnificent topping pattern that was wholly intact until April 6th and which got torn to ribbons afterwards.
Looking farther back still, you can see the origins of my frustration. Even in the context of the Everything Bubble, rounded tops still should produce results.
The left rounded top (in pink) created a multi-month demolition. The next rounded to (green) created an exceptionally sharp drop. Yet the most recent pattern yielded just a modest dip followed by a mega-rally to lifetime highs, all in the context of a weakening economy and unpredictable war.
My survival method has been to have merciless impatience with positions that aren’t behaving themselves. The diminishment of the AI Bubble will wreck this market, but whether that’s a matter of weeks, months, or years remains to be seen.
One thing’s for sure: the Midterm elections provide a staggering impetus for the current administration to keep things propped up, so even if we are fortunate enough to have another sell-off, it will be counter-attacked with every available tool the government has at its disposal.
