The Calm Before the Terrifying Bull

The major indexes have been trading sideways since the end of November.

But there is one tiny indicator showing the broad market is ready to push higher:

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While the S&P 500 index has been flat the past few weeks, more stocks have been rising than falling. (Source: Market In Out)

The advance/decline ratio looks at the percentage of stocks in an index that are rising compared to the number that are falling.

While the index has been flat the past few weeks, the advance ratio has been improving. Only A few names – notably Oracle – have been keeping a lid on markets.

“A rising advance/decline ratio is a sign of a healthy market that isn’t dominated by just a few names,” notes Andrew Packer. “And it’s a good sign that the market isn’t just dependent on a handful of tech stocks.”

The pre-Santa Rally setup shows a rotation out of Mag 7 tech stocks and into the broader market through the end of the year.

Under our terrifying bull market forecast – when investors buy stocks to beat inflation rather than for fundamental value – the advance/decline ratio will go into overdrive.

We’re not there yet.

~ Addison

P.S. Last week, we broke bread with an old friend of the house, Dan Amoss—a forensic accountant by training and a market bloodhound by instinct.

Dan was early to the tech wreck, earlier still to the rot in mortgage-backed securities, and famously short Lehman Brothers when that trade exploded 470% overnight on September 15, 2008. For the last decade, he’s been trading stocks and options for another friend you may recognize, Jim Rickards.

To the casual observer, Dan’s work invites comparisons to Michael Burry of The Big Short fame. The difference is that Dan was practicing this brand of forensic investing long before Hollywood learned how to spell “CDO.”

I’ve invited Dan to join us on Grey Swan Live! this Thursday, December 18, 2025 to share his findings directly.

Dan’s going to walk us through several trades he’s made during the AI boom—and, more importantly, the accounting stress fractures beneath the surface that lead him to believe 2026 could prove even more treacherous for individual investors than 2000–01 or 2008–09. It’ll be dense, unsettling, and refreshingly coherent. You won’t want to miss this one.

The major indexes have been trading sideways since the end of November.

But there is one tiny indicator showing the broad market is ready to push higher:

Turn Your Images On

While the S&P 500 index has been flat the past few weeks, more stocks have been rising than falling. (Source: Market In Out)

The advance/decline ratio looks at the percentage of stocks in an index that are rising compared to the number that are falling.

While the index has been flat the past few weeks, the advance ratio has been improving. Only A few names – notably Oracle – have been keeping a lid on markets.

The pre-Santa Rally setup shows a rotation out of Mag 7 tech stocks and into the broader market through the end of the year.

Under our terrifying bull market forecast – when investors buy stocks to beat inflation rather than for fundamental value – the advance/decline ratio will go into overdrive.

We’re not there yet.

~ Addison

P.S. Last week, we broke bread with an old friend of the house, Dan Amoss—a forensic accountant by training and a market bloodhound by instinct.

I’ve invited Dan to join us on Grey Swan Live! this Thursday, December 18, 2025 to share his findings directly.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!