In last month's review, we were concerned that the 10-year was 4.99% and I said:
"That’s the 10-Year Note Rate – DESPITE what the Fed does and, no, it is not being rejected at 5% – it is consolidating for a move higher!"
We also pointed out that the PRICE of the Stock Market far exceeds the VALUE of the US Economy and that indicated we are very likely near a top - so we elected to play things cautiously into October Earnings - and here we are!
Last month, the S&P 500 was at 7,619 and yesterday we closed at 7,807 - up 188 points is another 2.5% for the month, which is another $2Tn pumped into the balloon - call it $80Tn.
Yet, as we noted yesterday in our Live Member Chat Room (and in the podcast and video above), it's an EXTREMELY narrow rally, supported by AI and AI-adjacent stocks while the rest of the market is already in a correction, with 54% of the Russell 3,000 down 20% or more from their June highs - THAT is the story of Q3 - with less than 50% of the S&P 500 above their 200-day moving average.
I could just cut and paste what I said last month, when we added more hedges and decided to wait for earnings. The 2.5% move up isn't that impressive since we were down 1.6% from August on Sept 12th (our review date) so now we're simply back to the highs yet the situation has not changed - these are still UNSUSATIANABLE valuations - there is simply NOT ENOUGH MONEY IN THE WORLD to support a conversion of this stocks to another form of capital (like cash) - that is the physical, mathematical definition of unsustainable!
You CANNOT exit this market if you HAVE to - so you'd better learn to WANT to or you'll be stuck when it does correct.
