The Market Huddle AT THE EDGE OF THE CLIFF
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Nov 15, 2025 In a solo analysis, Patrick dives into whether the stock market is on the cusp of a significant decline, highlighting the implications of technical triggers and systematic flows. He argues that the market is overdue for a correction, with key downside targets set at 6,200 and 5,800. The discussion includes Nvidia's pivotal role, deteriorating market breadth, and potential alarm signals from financials and junk bonds. They also explore the risks posed by crypto sales, the implications of dollar hedges, and the contentious nature of gold and silver's performance.
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Market On Edge Of A Cliff
- The S&P repeatedly flirting with its 50-day moving average makes the market structurally fragile today.
- Systematic flows (CTAs, vol targeting, gamma) aligning near that level could trigger a rapid correction once breached.
Key S&P Levels To Monitor
- Watch the 38% retracement near 6,200 on the S&P as the first major downside target if breakdown triggers.
- Expect a possible second leg toward ~6,000–5,800 if sellers sustain pressure below the 50-day.
Breadth Deterioration Hides Narrow Rally
- Market breadth has deteriorated sharply: far fewer S&P stocks sit above their 50-day MA than during the April rally.
- A narrow market driven by a small group of mega-cap AI stocks hides underlying weakness.