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Last week we gave 10 reasons for the end of the bear market, and so far that call has been correct. That doesn’t mean the market can’t turn down again, but our signals continue to be supportive, which means we’re on the right track.
We have navigated the 2025 market well so far. And it's only March! We exited S&P500 stocks at the $6000 level, right before the meltdown. We bought back in at the bottom, near $5600. That’s a 7% drawdown that we sidestepped, and highlights the power of market timing.
How did we do it? We used a combination of economic analysis (we still think there’s no recession), technical analysis (recognizing market patterns that repeat), and positioning analysis (observing other traders panic-selling) to time our entry and exit. It’s not magic; it’s careful analysis of market signals combined with over a decade of experience.
No bottom on Mag 7
This week Mag 7 (a.k.a. “Lag 7” or “Drag 7”) continued to struggle while the rest of the market began a recovery. They are now down 7 weeks out of the past 8. Several of them even broke to new lows on Weds. The group is exhibiting high correlation to each other and falling together because all of them are too heavily geared to the same AI investments.
MktContext has been on the right side of the trade as we’ve been calling for their demise since late-November (see here, here, and here) which happened to be the peak. The group is down more than -20% since then. Our call was predicated on declining earnings, tightening regulations, over-investment in AI, and rising competition (see chart below…)
The rest of this article is paywalled. Inside, you can read about:
Mag 7 is dying
Macro news and Fed meeting
Market analysis (we bought the dip!)
Volatility analysis
Flows and positioning
