Why The NASDAQ Just Flashed A Major Warning Sign

Added: 2026-05-12

[00:00:00]Hello everybody on this crash Tuesday May 12th 2028. So the stock market went down today. I can't really say that it went down a lot.

[00:00:15]I mean you look at the NASDAQ for something that has just gone up straight up in a parabolic way for it to pull back some. I can't really say it's a big surprise. It's clearly a lot easier to get people to sell these names that have driven this here than to buy them. You know, do you want to sell a stock that's up 600% this year or do you want to buy a stock that's up 600% this year? So, when it starts going down, it's pretty easy to get people to sell it. So, I'm really not so worried. You know, market does not go up every day, every week or every month, even in a bull market. Although, it has felt like it goes up pretty much every day or at least every week for the last six weeks.

[00:00:54]But now we're in week seven. Okay. If I'm going to be negative about some of it, I would say the NASDAQ lagged, which I don't particularly like very much. I always prefer the NASDAQ being the more volatile and the higher beta stuff to lead. I like leaders to lead. It's not the be all and end all. It's just one thing that I would think is negative that we haven't seen in quite a while.

[00:01:18]Uh when people are buying the other things, I mean, look, that went up today. Okay. When people are buying the lagards, that's always a warning sign to me. It's not always a warning sign for the market. There have been times during this bull run where the Dow has led for a while. It hasn't stopped the market from continuing to go up, but just noticing that that did happen today, right? And you hear a lot of it that people that want to put money to work want to find the lagards. What's the next thing, you know, is is the big line these days. So, no big surprise that they are buying a lagard, so to speak. I don't love it, but it's not enough to get me to freak out just yet. Let's see.

[00:01:58]Um, and like I say, it might just be an indication this is going to happen for a few days here or whatever. You know, let's see where it goes. I don't think it's freakout time yet. But just one little warning sign. Clearly, the other warning sign was Jason Shapiro, your friend and neighbor, going on a public YouTube yesterday, saying, "This time it's different." which is the ultimate top tick thing for somebody to say and quite frankly that's why I wanted to say it because um if I can say that or anybody for that matter but me being just as much of a as anybody else can get on there and say this time it's different and the market still go up beyond where I said that well then we've got a strong market because anybody saying that at any time should top tick the market. So far so good. Let's see where we are in a week or in two weeks.

[00:02:48]But anyway, that's warning sign number two. I would say the other thing in general is this idea of inflation. It's here. It's happening. And and this whole thing about AI being the be all and end all and and it's driving GDP and the money that's being invested in it is the size of the entire GDP of the planet and all that. That's all great, but it's also inflationary. You know, they're buying up all the construction materials and everything to build these massive things that they're building. It's inflationary and we had I bring it up because we did have a CPI today. It wasn't that high. It was a little higher. But in fairness, the bonds did not act well given that it was only a little higher. Bonds were were pretty bad. And now we go back to this. What happens when bonds are bad? Well, it always starts with crude. Crude goes higher, which it did today, which leads bonds to go lower, interest rates go higher, um, and the dollar go higher, which is exactly what happened today.

[00:03:43]Okay, there's your euro going lower. And what has been the case in those cases since the war at least is then gold and silver go lower. But a funny thing happened yesterday. I talked about how silver had a very good day. I thought it was way out performing the stock market even overnight when the stock market gapped down on Sunday night. Silver went flat. It was the first thing to go flat.

[00:04:06]We haven't seen that until last night where we started out perform. And today, while silver did try to go down when things were getting a little bit ugly in the asset markets, it didn't stay down very long. You can see here around 11:30 when the stock market started to sort of fall. But then even as the stock market continued to fall, silver rebounded. It just seemed like it wasn't uh I mean the stock market didn't bottom until here.

[00:04:29]This is one o'clock, right? By one:00, you know, silver was all the way up here. So again, it's the second day in a row where silver has done this. this. I mean, silver actually closed up a nice amount today. So, again, I think silver is very interesting here. I really do based on this whole thing that I've been talking about every day with these correlations of the inflation trade. But getting back to that, you know, the question is going to be how inflationary is this whole thing going to be and how is the market going to react to that?

[00:04:59]And of course, we then have everybody's eyes on this 5% I think it is in the 30-year bonds and whatever it is in the 10 years, four and a half or something.

[00:05:08]And we're right on that. And that everyone wants to believe that's the trigger I hear. So, we're right on that.

[00:05:14]So, no surprise again that that they're selling stocks. Although, the ironic thing of course is the the more interests stuff like the Dow, you know, was was up today. So, strange thing there. and the S&Ps were were down, I don't know, 20 basis points today, you know, not hardly the end of the world, but I like it. I'd like to see the interest rates go higher just to see how the markets react to that and how they can handle it. It could be a great test.

[00:05:39]So, that's where we're at with that. If I'm going to comment on anything else today, I would say we did have a W was report for the grains and everything and it was quite bullish across the board and we saw soybeans go up, bean meal go up, bean oil go up.

[00:05:57]Now bean oil we know is pretty crowded.

[00:06:00]Didn't make a new high but did go up.

[00:06:02]Okay. Um, wheat, I mean, absolutely ripped to new highs after having a reversal day over here, having a decent sell-off in a crowded market and but now it just ripped. I made a new high. So, was very bullish, which is again inflationary. These are the grains.

[00:06:21]These are the foods, right? And I would be remiss not to point out that cotton, which is extremely crowded on Coot as you can see here, has been for a while, was a very bullish number. We made new highs and we failed. So there's a news failure on a very crowded market. Wink wink. Okay. Takes out today's highs.

[00:06:44]Okay. Then then the bull market continues. But probably a good decent a decent riskreward there in my view because we got a crowded market that is no longer reacting well to good news.

[00:06:54]Doesn't always work 36% of the time. It does pay off 4 to1. All I can say. So that's really it for today. And Bitcoin of course was was not very good today.

[00:07:05]The Bitcoin thing is so funny because the bulls will say, "Hey, we're 30% off lows, you know, and the bears will say, "Hey, we're 30% off highs." Which one is it? You know, I don't know. The whole Bitcoin bull bear debate is one of the funniest ones out there because people are just so emotionally attached, you know, to this whole it's going to a million, it's going to zero thing. I will continue to say it's probably going to neither one of those anytime soon.

[00:07:28]Just my thought. Okay, so that's it for today on this Tuesday. Let's see. We had a pretty good rebound into the close um in the stock market, but uh like I say, I didn't love the fact that uh NASDAQ was the weakest. Never love that.

[00:07:47]So, let's see how long this lasts. Let's see if it actually ends up being more than just, hey, this stuff was super overbought and had to have a down day.

[00:07:56]To me, that at this point, that's the only thing I can conclude here. I didn't see anything today that was a big surprise that it went down, but you know, let's see what happens tomorrow, okay? And we will talk then. Hope everyone's doing all right and uh we'll talk again tomorrow. Thank you. Just a quick note, if you like these daily videos, we do them four days a week, Monday through Thursday. For members, I try to not only do a market wrapup, but also what lessons we could have learned from the action today. Observe the things that we talked about in live time, which helps I find a lot. If you want to join monthtomonth, YouTube membership is $10 and you can just click the join button right under this video.

[00:08:35]But if you wanted to do a little bit longer, quarter or or or a year, the best way to do that is to go on So the link is in the description below. With this membership, you also get our coot charts for both the equity indices and the crypto. If that sounds worth it, you know, give it a shot and and we hope to see you there. All right.

[00:08:56]Thank you. And uh we'll talk