A Rare Bullish Sign

Friday’s market action wasn’t just a sigh of relief – it actually kicked off a somewhat rare market indicator that suggests the meltup has begun.

Some context? We’ve been critial of the stock market for its high concentration – with Nvidia and Microsoft alone making up over 15% of the weighting in the widely-followed S&P 500.

It doesn’t take a big move from either of those companies to weigh on the index. Market breadth – the percentage of total companies moving up or down – is another factor.

So what happened Friday? A rare “90/90 day.”

That’s when 90% of stocks advanced at the same time – a massive level of market breadth. And when 90% of stocks also rose on heavy volume, suggesting a fundamental shift, not a one-time reaction to news:

Turn Your Images On

Friday’s 90/90 day shows tremendous volume and breadth in a market that has sometimes lacked it. (Source: Carson)

When these 90/90 days occur, the market is up – believe it or not 90% of the time a year later. And on average, it’s up by more than average – 23%.

“This is one of those charts that seems out of odds when they occur,” notes our Portfolio Director Andrew Packer. “90/90 days triggered often in the first few years after the Great Financial Crisis, and sure enough, stocks rose higher, even if they seemed overvalued or the economy seemed too sluggish at the time to justify the trend.”

If that’s the case this time around, the seasonal market dip this year may give way to what Grey Swan Fraternity member Mark Jeftovic has been calling a “terrifying bull market” – where stocks rally not because of fundamentals, but because investors perceive it as the place to be to avoid inflation.

~ Addison

P.S. Stocks weren’t the only assets that popped higher on Friday as Federal Reserve Chairman Jerome Powell hinted that rate cuts were coming, inflation or not.

Gold popped higher on the news. Makes sense in our “terrifying bull market” thesis.

And bitcoin jumped higher, although it sold off over the weekend as large players decided to take some profits off the table. Both are excellent long-term inflation-protecting assets, and gold in particular is well off of where it should trade based on our calculations.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Friday’s market action wasn’t just a sigh of relief – it actually kicked off a somewhat rare market indicator that suggests the meltup has begun.

Some context? We’ve been critial of the stock market for its high concentration – with Nvidia and Microsoft alone making up over 15% of the weighting in the widely-followed S&P 500.

It doesn’t take a big move from either of those companies to weigh on the index. Market breadth – the percentage of total companies moving up or down – is another factor.

So what happened Friday? A rare “90/90 day.”

Turn Your Images On

Friday’s 90/90 day shows tremendous volume and breadth in a market that has sometimes lacked it. (Source: Carson)

When these 90/90 days occur, the market is up – believe it or not 90% of the time a year later. And on average, it’s up by more than average – 23%.

~ Addison

P.S. Stocks weren’t the only assets that popped higher on Friday as Federal Reserve Chairman Jerome Powell hinted that rate cuts were coming, inflation or not.

Gold popped higher on the news. Makes sense in our “terrifying bull market” thesis.

If you have any questions for us about the market, send them our way now to: Addison@GreySwanFraternity.com.

Mining stocks amplify everything. First Majestic went from losing money to 45% margins without building anything new. They just held the line on costs while silver did the heavy lifting.

That cuts both ways. If silver drops hard, margins compress just as fast. Same leverage, opposite direction.

The miners with the lowest costs and cleanest balance sheets will hold up best in a pullback and capture the most upside if the deficit keeps grinding.

Economists at Goldman Sachs said this morning they expect core inflation to finish the year around 2% even while GDP rises at a “surprisingly strong” 2.5% clip.

In our view, their inflation forecast is optimistic. Their GDP call? Modest.

The last time we pumped this much liquidity into the system — 2020 through 2022—the result was a manic asset bubble, runaway inflation, and an epic hangover at the Fed.

Goldman’s optimism has triggered a fresh round of bullish bets: cyclical stocks are rallying, “dispersion” in the S&P 500 is spiking, and the Fed is expected to cut interest rates twice before Jerome Powell gets kicked out of Washington at the end of his term on May 15.

Anecdotally, we’re hearing stories of warehouses full of GPUs sitting unused for lack of energy to power them. It’s a natural feature of the heavy capital investment in new machines. The grid has to catch up!

While Trump’s great reset rolls on in 2026, keep an eye on modular nuclear reactors and increased demand for uranium, natural gas and related resources.

These PM producers are literally printing the most ‘hard money’ that they ever have at these metals prices and record margins here at the midway point in Q4.

If there ever was a time for this sector to get overheated and frothy, this would be it… only that isn’t what we’ve seen playing out.

PM producers are still insanely profitable at even at current metals prices and should be far more valuable based on their margins, revenue generating potential, and their resources still in the ground.