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A few weeks ago I made note of the fact that the stock market internals were giving a huge RED FLAG warning sign for the financial markets by going down while the S&P 500 and Nasdaq kept doing up, meaning that only a few stocks were driving the entire market while most were sagging. That’s typically what happens in a topping phase of a market, but it can go on for months.

Then, last month, we got some talk from Trump of an Iran deal and a nice bounce on gold and silver off of their moving averages, but this past Friday gold and the GDX ETF both closed below their 200-day moving averages and the straight remains closed.

The Iran conflict is still pushing up global inflation, and causing pockets of distress in the global economy.

In the past two weeks the stock market for Indonesia has blown up, as you can see for the IDX Indonesia ETF.

Indonesia imports almost all of the energy and commodities it needs for its economy.

And Bitcoin has gone in another death spiral.

The Bitcoin dump is a sign of RISK OFF in the markets.

On, Friday the Nasdaq fell 4.18% off of its most recent high in one day, and Treasury bond yields ticked up.

It looks like the internal warning signal that was spelling trouble is valid.

I’m being cautious right now on the markets.

If they pullback I’ll eventually be looking to buy out of the mess, but we’ll have to see how it all plays out.

Gold, silver, and the mining stocks also broke down, which is a likely warning signal for the broad market.

In 2022, they pulled back sharp in the summer and then the stock market fell hard into November.

Until the straight reopens it’s hard to be bullish now on these markets, after the blow-ups and breakdowns - and no one knows when that is going to happen.

I’m just taking this one week at a time and not doing much trading for now.

Michael Saylor, the Bitcoin guru, the Microstrategy billionaire, though, says everything is fine. However, just because someone is a billionaire doesn't mean they are a genius. Saylor created a reflexive leverage loop. He raised money and bought Bitcoin he borrowed money and bought Bitcoin. It works great on the way up. But once it starts to go down it's really ugly. When the whole thing has to unwind. The leverage loop goes both ways. Read into Michael Saylor, the man who became the Bitcoin guru legend of last year. That was then this is now.

-Mike

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And…..

I got an email from my brokerage inviting me to buy into the SPACE X IPO. If you are getting these too you should understand that if there was huge institutional demand for the IPO that you would never get an email like this. If you believe Elon is going to put data centers in space than you may want to invest, if you don't believe it, well, then you may decide to do what I did and hit the delete button. Do you believe?

-Mike

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