What a year this has been for the stock market.

These are historic returns being put up in 2025, so investors should be very pleased right?

Nope.

We have some of the most historically bearish sentiment on record. And it's mostly because Large-cap U.S. growth has been such a massive underperformer in 2025.

Look at these epic returns across Asia, Europe and Latin America. And compare them to the negative performance in the United States.

Listen, I understand that many Americans have an irresponsible amount of U.S. Large-cap Growth in their portfolio. 

I get that.

And those kinds of people are getting smoked in this environment. 

The U.S. is the last place you want to be invested this year. And the data shows.

What's hilarious is that in Q4 last year, the journalists parading around as economists suggested on the cover of their print magazine that the United States was the envy of the world.

...

Let me bottom line it for you.

During bull markets you regularly see the laggards catch up to the leaders. That sort of rotation is perfectly consistent with bull markets throughout history.

During bear markets, it's often the remaining leaders that ultimately catch down to the original losers leading the market lower.

And that's the big question right now. Is the fact that the U.S. is lagging lately just the beginning of more selling coming for stocks?

Or does the lagging U.S. catch up to the leaders all over the world.

Look at the expansion in participation across continents:

I think about it like this.

There have been and continue to be opportunities in stocks with exposure to these types of markets.

Remember that they are very different to the mega-cap Tech-heavy U.S. indexes. Foreign markets generally have a lot more exposure to Industrials, Financials and Natural Resources than American indexes.

As you can see, we continue to focus on the things that are working, and rotation is working. It often does during bull markets.

While all this is happening, we've already started to see relative strength from...

I'm constantly on the lookout for opportunities where market participants are most vulnerable.

If our data suggests that a market is too extended in one direction, I want to find ways to profit from an unwind in that positioning.

You saw it recently with how well we've done in our China trades, where 8 out of 8 trades since the election have all at least doubled in value. Think about how much money we've made in these stocks, despite any selling pressure you've seen in the United States recently.

It's not about the fundamentals. It's the positioning. No one owned Chinese stocks, and so the squeeze was on!

Last summer when all the libs were upset with Elon becoming besties with President Trump, we saw a tremendous opportunity to fade their negativity.

See: ...

Semiconductors rallied this week with Nvidia ripping almost 8%.

This all comes as journalists on basic cable tell your parents that the Nasdaq is in a correction.

You see how this works?

Here's Nvidia finding support at the same key extension levels where the buyers stepped up in the Fall:

As I've said a whole bunch of times, if the Semiconductor Index completes this massive top relative to the S&P500, then chances are that the bull market is cancelled.

With Semi's rallying this week, despite the selling pressure in other areas of the market, that alpha put the Semiconductor Index back above all that support, invalidating any bearish implications that may have occurred earlier in March:

If Semi's do actually break, then I believe there is a bigger structural problem in the market, particularly in U.S. equities.

Global equities continue to act well, pointing more towards a rotation, rather than a full blown credit event....

Contrary to popular belief, we're not just Americans. We're earthlings.

I think that gets forgotten, especially after the United States stock market outperformed practically everything else for so long.

You have a combination of home country bias and you have the recency bias layered on top of that.

So when U.S. Technology is an underperformer, as it has been since last summer, many investors with too much exposure in those areas are blinded by their losing, to see all the winning that's going on around them.

China, for example, just closed the week out at new 4-month highs. The CSI 300 is basically the S&P500 of China, and just closed at the highest levels since early November.

Meanwhile, you're seeing the German DAX this morning working on the highest weekly close in the country's history.

Whether it does or doesn't, the relative strength in Germany has been off the charts, despite any selling pressure you've seen in the U.S.

Keep in mind that outside of the American Indexes (S&P500, Dow & Nasdaq), I would put Germany right at the top of the most important markets list.

This is a very big deal, especially when...

The selling in US Growth stocks continues. 

But why have European stocks and China done so well? 

They don't have any US Growth stocks in their indexes.

While the selling pressure in these stocks has accelerated recently, the underperformance has been there since last summer. We've been pointing out that High Beta never broke out relative to Low Volatility stocks while the major indexes were making new highs.

And now they're making new lows. Look at the underperformance from Tech along with the underperformance in High Beta:

And I'll be the first to tell you that it affects me too. Remember, that on a personal level, my wife and I have retirement accounts and we have 3 kids with college funds. I'm not immune to the selling in US Growth stocks.

I'm right in there with you guys, regardless of what I do for my day job.

Now, this is a great example of why we don't want to limit ourselves to a long only strategy in U.S. stocks.

I've already got plenty of that stuff. Too much, if you ask me. So I need to go out of my way to find additional sources of income and returns. 

This is strictly on a personal level,...

I've got some good news, some not so good news, and some outright bad news.

Let's dive in.

First of all, these are all concepts that were discussed at length on our LIVE Monthly Charts Strategy Session last week, so check out the full video here.

As an update, here's the most bullish thing happening in stocks right now. Both Germany and Hong Kong closed the week at new highs. These are new 3-year highs for the Hang Seng and new all-time highs for the DAX:

If there was some sort of Global Crisis or Credit Event of any kind, my bet is NOT that these two major indexes would be breaking out to new highs.

These are not safe havens where investors can hide out and wait for the storm to pass. It's quite the opposite actually.

So strength out of these areas above points to bullish and healthy...

We're only in the market to make money. Let's not forget that.

We're not journalists who have to tell stories about things that may or may not be happening.

We're not Economists trying to identify the next recession.

We don't care about your stories, and we care even less about your economy. As far as I'm concerned, recessions are a choice for a lot of people.

I try to make sure that I fall in that category.

One way we do that is to weigh all the evidence and decide if this is a bull market or a bear market.

And the reason why this is important is for one simple reason: To decide how we want to be spending our time.

Today is Monday. What should I be doing today? That's the question I want to answer.

In other words, should I be spending my time looking for stocks to buy, or should I be spending my time looking for stocks to sell?

That's really what this is all about. You can see exactly...

There's never a dull moment in the market. It's always something.

The mixed messages are a feature, not a bug.

That's just how it's always been. So it's our job to weigh all the evidence and make the best decisions we can make, knowing full well that we have incomplete information.

Today I want to talk about 2 theories that may or may not be playing out, but it's something I'm thinking about. 

First, is this thing about investor sentiment. How is it possible that individual investors in America are the most bearish they've been since the bottom of the last bear market back in 2022?

I think it's because of what they own.

They're not in China, which is making new 3-year highs. 

They're not in...

Wow what a week to be an investor in stocks.

The broadening of participation all over the world continues. 

Meanwhile, the pessimism is stronger than ever.

I'm noticing the most angry of people are the ones who want stocks to fall because they don't like the Trump and all his buddies. 

But their anger is not the market's concern. If anything, it's just more fuel to drive stocks much higher, which would enrage them even more. 

It's pretty hilarious to watch actually.

Laughing is good for you. But laughing at people who haven't bothered to count and actually see how well stocks are doing, is all the more amusing.

You know, you can dislike Trump, and still recognize how strong this bull market continues to be, and how much stronger it's getting week over week.

Here is one of the most important stock market indexes in the world. I would argue that after the S&P500, Dow and Nasdaq, this one is right there behind it, and arguably right along there with it in the same category of importance.

EFA represents developed markets outside of North America. So think a ton of European stocks, United Kingdom, Japan and...

Today I'm going to share a little trick that I like to use to help put the current market volatility into perspective.

The math is like this. I take the value of the VIX and divide by 16. And that's what the market is pricing in for a normal daily move.

For example, if the VIX is at 24, then I would expect a 1.5% move in the S&P500 each day.

So if the VIX is at 16, then I would expect a 1% move.

If the VIX is at 32, then I would expect a 2% move.

Simple.

Now, many people wonder why it's 16, and that's where we get way above my paygrade. If you don't understand how the math around options works, don't worry. No one else does either.

I'm not even joking. Options math is next level impossible. Just ask any of the best options traders. They'll be the first to tell you.

The 16 number I believe has something to do with the square root of the number of trading days in a year, but I'm confident there's more to it than that.

Also, for you statistics majors, I believe there is technically like a 67% probability of these results, or something along those lines.

So keep in mind that The Rule of 16 is just a back of...

Last night might have been the most important LIVE Conference Call we've ever had.

Traders and Investors have so many questions right now about the coming months and quarters that we had so much to talk about.

We went over all the most important trends in the market today, what our favorite setups are from the long side, what the new downside risks look like, and my one favorite place to put money to work RIGHT HERE RIGHT NOW.

Click here and register to get full access to last night's LIVE Video Conference Call.

You'll be able to pause, rewind and fast forward. And the slide deck with over 160 charts is also available to download right away.

Watch the Replay and get the Trade Ideas...