Insights 
VT 
The U.S. equity rally has reignited comparisons to past bubbles, particularly in tech and AI sectors.
Traders should monitor potential rotation from mega-cap to value stocks or consider hedging NAS100 or SP500 exposure through alternative assets.
Tariff discussions, the U.S. earnings season, and upcoming central bank speeches may add volatility and influence rate expectations.
This week’s US CPI and PPI data will be key in shaping sentiment on inflation and market valuations.
Bubble Talk Returns to the Forefront
Valuation concerns are back in focus. The S&P 500 and Nasdaq have surged sharply this year, with tech and AI stocks driving much of the gains. Analysts caution that current levels resemble past market bubbles.
Goldman Sachs executives maintain that the rally is still supported by earnings and growth expectations rather than pure speculation.
Jamie Dimon of JPMorgan warned that a material correction within 6–24 months is possible. While many see potential upside, some believe downside risk is underestimated.
Market Structure: Narrow and Top-Heavy
A key warning sign is market breadth; only a few stocks are driving the rally. When indices rise but most constituents lag, breadth is weak. Additionally, technical indicators at extreme levels suggest vulnerability.
Recent U.S.-China tariff discussions have unsettled markets. On Friday, threats of 100% tariffs and export restrictions led the S&P to drop 2.7%, the Nasdaq to drop 3.6%, and the Dow to drop nearly 1.9%, highlighting the market’s sensitivity to news.
Earnings, Policy, and the Path Forward
The upcoming earnings season may serve as the first stress test. Disappointing guidance or margin pressures could shift market sentiment.
Federal Reserve and other central bank speeches are potential catalysts; a dovish tone could boost risk assets, while hawkish comments may reverse gains.
Trade tensions with China add another layer of risk, especially amid stretched valuations. Markets remain highly responsive to policy developments.
Cautiously, upward movement is still possible, but downside risk is increasing. Traders are advised to hedge, favor relative strength strategies, and avoid overcommitting to momentum names at extremes.
Key Symbols to Watch
- DJ30
- NAS100
- SP500
- VIX
- ARKK
Key Movements of the Week
US Dollar Index (USDX)
The dollar pulled back from 98.90–99.00, near last week’s monitored resistance. Support is now near 98.20, with the next downside target at 97.90 if momentum continues lower. Bias remains bearish below 98.90; traders should observe consolidation between 98.20 and 98.70 before re-entry.
S&P 500 (SP500)
The index fell from 6,750 resistance toward 6,510 amid risk-off flows. Momentum remains bearish below 6,600–6,620; next support levels are 6,440 and 6,395. Short-term relief rallies may be possible into 6,600; a clean break above 6,660 would ease pressure.
Gold (XAUUSD)
Price paused near 4,010 after a strong run, consolidating above 3,985–3,995 on H4. Bias stays upward above 3,980; a push through 4,045 could target 4,080 then 4,100. Trade tactically: buy dips 3,990–4,010 with tight risk; fade only if price closes below 3,980.
Bitcoin (BTCUSD)
Bitcoin dropped from 122,700 to a low near 109,600, stabilizing around 111,200. Short-term support at 108,600–107,240 could trigger a bounce. Expect intraday rebounds toward 113,000–115,000; broader recovery depends on overall risk sentiment.
EURUSD
EURUSD stabilized near 1.1620, rebounding from 1.1580–1.1600 support. Short-term bias is mildly bullish toward 1.1660; a break above could extend to 1.1700. Watch for consolidation at 1.1580–1.1660; a drop below 1.1580 opens path to 1.1520.
USOil
Oil extended losses below 60.55, testing 58.35 support. If consolidation fails above 58.00, the price could slide toward 53.00. Short-term rebounds face resistance at 59.80–60.50; bias stays bearish below 60.55.
Bottom Line
The risk of a U.S. equity bubble is back amid narrow leadership and stretched valuations. Tariff threats, earnings surprises, and central bank communications may trigger swings. Hedging, selective exposure, and respect for technicals are key over chasing momentum.
