Jumat, 16 Mei 2025

5 Warning Signs Behind This Week's 'Fake' Rally

Don Kaufman here.

If you think we're finally through the worst of market risks and can comfortably ride this bull train... THINK AGAIN.

I've seen everything this week - from gamma squeezes to an absolute wild two-sigma move that left statisticians scratching their heads. The market not only got it wrong, it got it WILDLY, CATASTROPHICALLY WRONG.

When I look at what's happening beneath the surface, I see a dangerous pattern forming that most traders are completely missing...

BOND VIGILANTES ARE CIRCLING: The Treasury bond market is wallowing in the mud and can't get off the floor. If bonds break through 112, prepare for a financial cataclysm that will shock the S&Ps
THE SNEAKY VOLATILITY FLOOR: While everyone celebrates the market surge, few notice that volatility refuses to drop below 17.5 - a critical signal that smart money is still hedging against disaster
GAMMA SQUEEZE MADNESS: Tuesday's Nvidia explosion wasn't random - it was the result of a dangerous feedback loop where retail call buying forced market makers to buy stock, creating a vicious upward cycle
THE TECH FRENZY 2.0 WARNING SIGN: When worthless companies like SuperMicro (with multiple fraud accusations) suddenly start surging again, it's time to get extremely cautious
THE $92 EXPECTED MOVE LIE: After a 300-point explosion this week, volatility models suggest only a $92 move next week - a dangerous fantasy that could catch traders completely unprepared

Remember Monday's gap higher on tariff news? That was just the beginning. But what happens when the next weekend shock arrives? These 300 points up could become 300 points DOWN in a heartbeat.

The merry-go-round of market risks never stops - it just keeps changing which monster is chasing you.

WATCH THE COMPLETE WEEKEND ANALYSIS HERE

To your success,

Don Kaufman