YEAR END STRENGTH

Extreme Fear Does not Last! In fact it leads to a Bullish surprises. Lets revisit why fears are elevated.

EXPECT TGA Spending to tamp up in Q1. This becomes a structural tailwind!

• As the US Treasury Builds up it's spending account (TGA), it also drains markets by sucking cash from the banking system. A near 1-trillion drained is 10 trillion in leverage (fractional reserve banking). This has also pulled down Global M2 and M2 yoy!

Historically:

• Liquidity YoY trending down = headwind for equities, crypto, high beta
• Liquidity YoY turning up = tailwind for markets

Business Confidence Uncertainty

ISM Panic
The Next Bullish catalyst is the ISM business cycle. Rate cuts accelerate this trend while "No Rate CUT" may tip the economy into panic mode.

🔵 Positive Divergence

👉 The index looks fine, but under the hood stocks are ripping higher

Why it matters:
When we see the market broaden AFTER NVDA earnings, this is a very bullish sign.

👉 The average stock is still in a long-term uptrend

👉 The heartbeat of the current swing or cycle is trying to recover

👉 A sustained break above 50% on the 20MA often precedes sharp upside in the major indices.

Bullish Seperation

• This is like a car suddenly flooring the gas pedal — the short-term acceleration exceeds the medium-term trend, which usually precedes stronger follow-through

Longterm Breadth Seperation

• A rising gap between 50MA > 200MA is a classic hallmark of a regime shift from oversold → accumulation → broad uptrend.
• This is like not just pushing the gas pedal — but getting the entire engine humming again.

Market Participation is likely to rip into Year End