{"id":25478,"date":"2025-10-09T07:30:00","date_gmt":"2025-10-09T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=25478"},"modified":"2025-10-08T13:46:16","modified_gmt":"2025-10-08T17:46:16","slug":"latest-evidence-shows-this-rally-is-increasingly-vulnerable","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/latest-evidence-shows-this-rally-is-increasingly-vulnerable\/","title":{"rendered":"Latest Evidence Shows This Rally Is Increasingly Vulnerable"},"content":{"rendered":"

The stock market may have escaped its typical September slump. But warning signs continue to flash nearly everywhere you look telling me this extended rally is increasingly vulnerable to a reversal.<\/p>\n

You can see the latest evidence for yourself in the chart below…<\/p>\n\n

\"\"<\/figure>\n\n

Hedge funds and other big money institutional investors are all in for stocks right now. And that’s not only true for the Nasdaq and S&P 500, but for stocks around the world.<\/p>\n

Today, 94% of global markets are trading above their long-term trends, as measured by the 200-day moving average. Most are just as overbought as the S&P 500 Index.<\/p>\n

It’s an extremely crowded trade on the long side not just here at home, but worldwide.<\/p>\n

And not only are funds fully invested – but they’ve borrowed massive amounts of money to go long. Gross leverage (or borrowed money on margin<\/em>) is above 300% today for all fund strategies worldwide.<\/p>\n

That’s in the top 98% percentile of global fund positioning over the last decade or more. Put another way, funds are leveraged to the hilt more than ever, with little or no buying power remaining!<\/p>\n

There simply isn’t much buying power left to push stocks even higher.<\/p>\n

Sure, stock market seasonality has turned bullish, as you can see below. Investors worldwide anticipate the typical year-end rally. But not so fast.<\/p>\n\n

\"\"<\/figure>\n\n

The S&P 500 has gained nearly 8% on average from October through December historically.<\/p>\n

But notice the pullback in stocks that typically starts right about now, with the market often experiencing a scary selloff in the weeks ahead that doesn’t bottom until around Halloween.<\/p>\n

Bottom line<\/em><\/strong>: The market is certainly overdue for a pullback. So far stocks have defied gravity and stayed on course to the upside. Seasonality suggests we should see a strong year-end rally, but only after a mid-course correction in the weeks ahead. If so, any pullback may prove to be a good buy-the-dip opportunity.<\/p>\n

Good investing,<\/p>\n

\"Signature\"<\/p>\n

Mike Burnick
\nContributing Editor, Market Minute<\/em><\/p>\n\n\n","protected":false},"excerpt":{"rendered":"

Warning signs continue to flash in the market.<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[],"person":[155],"newsletter-type":[],"ticker":[],"class_list":["post-25478","post","type-post","status-publish","format-standard","hentry","category-market-minute","person-mike-burnick"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=25478"}],"version-history":[{"count":1,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25478\/revisions"}],"predecessor-version":[{"id":25484,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/25478\/revisions\/25484"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=25478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=25478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=25478"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=25478"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=25478"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=25478"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=25478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}