A market that can’t rally is going to crash amid extreme complacency.

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The current state of the market reveals concerning trends, as the Dow struggles to maintain upward momentum, with each rally attempt met by afternoon declines. This pattern, coupled with the VIX’s significantly lower level compared to previous market peaks, suggests a market environment characterized by extreme complacency. Such conditions, reminiscent of periods preceding market crashes, raise alarms about the potential for a looming downturn. Furthermore, the widening spread between US 2-year Treasury yields and the S&P 500 dividend yield adds to apprehensions about economic uncertainties ahead. Powell’s hawkish remarks exacerbate the situation, particularly impacting global currencies like the Canadian dollar. Amidst this backdrop, Cathie Wood’s reiterated support for Tesla over Nvidia raises questions about investment strategies, especially as Tesla faces challenges, including layoffs and anticipated poor earnings. As Netflix prepares to announce its earnings, the Tech rally, which once gained momentum, now appears to be losing steam, signaling potential volatility ahead.



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