Can The Stock Market Bubble Continue Into 2026? | Sven Henrich

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Sep 18, 2025

Sven Henrich, a market strategist and chart analyst at NorthmanTrader.com, dives into the current stock market dynamics. He explores the phenomenon of fifth-year bullish rallies and the role of liquidity in fueling stock prices. Sven discusses the implications of declining U.S. dollar value on market valuations and the widening wealth inequality in today's economy. He also highlights potential correction scenarios, emphasizing the need for cautious investing amidst extreme valuations and tightening fiscal conditions.

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INSIGHT

Liquidity Has Overridden Fundamentals

Since 2009 markets have trended up with rare quarterly down-candles, driven by persistent liquidity and interventions.
Those mechanics can sustain rallies despite extreme valuations until liquidity conditions change.

INSIGHT

Junk Bonds Mirror Equity Liquidity

Junk bond and S&P correlation shows easing financial conditions have powered the rally since Oct 2022.
Nearly 98% weekly correlation highlights liquidity as the dominant market driver.

INSIGHT

Dollar Direction Controls Risk Rally

A collapsing U.S. dollar has been a major tailwind for risk assets this year.
If the dollar reverses, equities may face a meaningful correction like 2018's dollar-driven selloff.

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When Sven Henrich of NorthmanTrader.com was last on this program in May, he stated that it was "do or die time for the bears"

Well...it seems they died.

Since May, the S&P has rocketed to new all-time highsWe now see many equity valuation levels at their most extended levels in all of history.Though this is happening at a time when the global economy is showing increasing signs of slowdown.So as we head into the end of the year, can the bulls maintain their dominance?To find out, we'll now hear from the man himself.

Follow Sven at https://northmantrader.com/

Or on X at @northmantrader

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#technicalanalysis #marketcorrection #bubble _____________________________________________

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