My thesis is that the US stock markets reached peak bullishness in October 2025 and have been deteriorating ever since. It is no coincidence that Bitcoin did the same. I think we can use Bitcoin as a measure of investor optimism and a guide to what is likely to happen in US share markets. When Bitcoin turns higher, share markets will likely do the same.
There is no sign of a turning point yet. Instead, further weakness seems likely. On reflection, that comment is an opinion; they sneak in everywhere, so it doesn’t mean much. The key point is the absence of any form of buy signal. The momentum in the market is down, associated with a declining moving average. There are signs of a flattening out, but nothing sufficiently positive.
Bitcoin became a sell between $100,000 and $110,000 in November 2025, and there has been no sign of any trend reversal. Share markets, with some time lag, are also losing momentum and heading down. It is not confirmed yet, but I suspect, opinion creeping in again, that we are in a ‘cash is king’ market.
‘Cash is king’ markets are (a) dangerous to invest in, and (b) likely to be a source of great opportunities in the future, when stock markets turn higher as they always do. We are making great efforts at Quentinvest to position ourselves to spot those opportunities when they start to occur.
Palentir has given a green line buy signal. This is encouraging, but I would still wait for the yellow line buy signal before buying. Despite a relentless flood of positive news, Nvidia remains stuck in sideways, and the overall market sentiment remains negative.
Maybe the war will end soon, and oil prices will settle back, but is that what has been causing share prices to fall, or is there something else going on?
The iShares Expanded Tech Software ETF (IGV) has a negative chart, with all the moving averages declining. There was a trendline breakdown around $100, with no sign of a reversal higher. Software stocks are under particular pressure from the AI revolution, but the chart is symptomatic of patterns across the stock market.
In the last two days, the Nasdaq 100 has rallied around 1,000 points, but this happens in bear markets. If and when share prices change direction, sell signals will be replaced by buy signals. There is little sign of this happening.
We need to watch and wait until, metaphorically speaking, we see the whites of their eyes.
