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Ripple Effect

The Calm Before the Terrifying Bull

Loading ...Addison Wiggin

December 16, 2025 • 1 minute, 56 second read


Advance/Decline ratio

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.


Seven Grey Swans, One Investment Strategy

January 5, 2026 • Addison Wiggin

The entire process of reviewing forecasts and then issuing new ones has made us more intensely focused on our purpose. We’re not actually trying to “predict the future” to parody the disdain with which so many lazy media pundits would dismiss our approach.

Rather, we’re examining trends in the news cycle and trying to separate the wheat from the chaff. What signals are coming through stronger than the nauseating cacophony of  Washington and Wall Street, amplified by legacy and social media alike?

There are years when markets feel confusing because they are volatile. And there are years when they feel confused because the old explanations no longer work.

Seven Grey Swans, One Investment Strategy
Debt Hangover? Nah…

January 5, 2026 • Addison Wiggin

To start the year, the U.S. government didn’t bother with a hangover, rather it continues to spend so profligately that if we compared it to a drunken sailor, we’d have to apologize to the sailor.

Closing out 2025, America managed to rack up over $38 trillion in “official” debt. Looking at debt relative to GDP, it’s back over 121%.

Debt Hangover? Nah…
Grey Swan #1: The Age of Intelligence: Rise of the Network State

January 2, 2026 • Addison Wiggin

The Grey Swan is not the invention of artificial intelligence. It is the moment the public understands that incentives have changed.

Network economics reward different behaviors than factory economics. Platform states operate by different rules than welfare states. Coordination outruns legislation. Culture lags technology. Conflict follows the gap.

In Financial Reckoning Day, we described how systems adapt when fiscal choices narrow. The Age of Intelligence represents that adaptation in software and silicon.

By the end of 2026, most people will recognize that machines now think alongside humans in logistics, finance, and planning. Some jobs disappear. Others appear. Output improves faster than consensus expects. Politics argues. Markets enforce discipline.

Grey Swan #1: The Age of Intelligence: Rise of the Network State
Grey Swan #2: The Crack-Up Boom Reaches Terminal Velocity

January 1, 2026 • Addison Wiggin

The crack-up boom does not signal immediate collapse. Monetary policy gets a new master… inflation rages… and investors chase stocks as a means of keeping pace with their savings.

Markets may even finish 2026 higher than they begin. Many investors will still lose purchasing power along the way. Terminal velocity will feel like momentum… until reality hits.

In 2026, expect breathtaking advances, with the AI narrative remaining dominant, and sudden reversals to occur quickly. Expect liquidity to remain plentiful and erode discipline even more.

Grey Swan #2: The Crack-Up Boom Reaches Terminal Velocity