Market Warning Signs

US large-cap equities may be approaching a major market top because weakening market breadth and credit divergences are not confirming the S&P 500’s highs.

• The NASDAQ Composite reached a marginal new all-time high while stocks making new 52-week lows outnumbered new highs for 17 consecutive days.
• US CCC-versus-BBB credit spreads widened significantly over the past six months even as the S&P 500 hit repeated all-time highs, resembling conditions seen before the 2000, 2008, 2020 and 2022 downturns.
• The S&P 500’s rolling 50-day correlation with its cumulative advance-decline line weakened throughout 2026 and turned negative, a divergence last observed at the peak of the dot-com bubble.
• The share of S&P 500 constituents trading above their 200-day moving averages plunged over the past month while the index stayed near its highs, echoing the deterioration before the April 2, 2025 selloff.
• Crescat argues that gold, junior mining exploration and put options on the S&P 500 offer the best hedge, while acknowledging operational risks, volatility and the possibility that options expire worthless; its activist metals portfolio has been developed over six years with advice from two PhD economic geologists.

Takeaway: Investors should treat the apparent strength of US large-cap stocks cautiously and consider gold, diversified exploration-stage metals companies and inexpensive S&P 500 puts as hedges, while recognizing that the proposed strategies remain risky and that Crescat targets $20,000 gold over the next 3 to 7 years.