Question #1
Are you concerned with current market breadth, major indicies making new highs while the major A/D Lines are not confirming as of now...
We do pay close attention to divergences in market breadth and recognize that small-cap indices and certain bank indexes have yet to surpass their 2021 highs. Nevertheless, markets often disregard such negatives and continue moving higher. Our models are grounded not in fundamental factors, but in the patterns of market action itself. Currently, our indicators produced a buy signal on April 4, and we continue to maintain a long position in the S&P 500. As of December 31, 2025 the S&P 500 has risen 34.91% since April 4th.
Question #2
Where do you see us in terms of the current stage of this Bull Market?
While our personal view is that this bull market has the potential to move significantly higher—albeit with periodic corrections—this outlook is informed by the conditions that accompanied the April market low, which are typically seen at the start of extended bull markets. Nevertheless, our recommendations are driven strictly by market data rather than personal opinion. At present, our indicators signaled a buy on April 4, and we remain long the S&P 500 as of December 31, 2025. The index has advanced 34.91%, during this period marking this trade as notably successful.
Question #3
I would like to understand how Milton views the current supercycle in commodities, particularly oil in terms of where we are in the cycle, and how to position to profit over the next 18 months without taking undo risk.
As we lack comprehensive data on commodities, any opinion offered would carry limited weight. However, given President Trump’s emphasis on aggressive domestic energy production, (Drill, Drill, Drill) we do not anticipate seeing record oil prices over the next five years.
Question #4
Similarly, what are his views on adding Gold to a passive beta portfolio at current levels, versus waiting for possible market correction in 2026/27.
Gold is regarded as a commodity that can be held and stored as a tangible asset. Historically, gold purchased at average prices has delivered annual returns of approximately 5%, largely untaxed and unrecorded. However, outcomes depend heavily on the timing of purchase. Those who bought at peak prices in 1980 or 2011 saw returns that failed to keep pace with inflation, while purchases made in 2000 or 2016 resulted in strong gains. At present, our assessment is that gold is overvalued relative to its historical relationship with inflation and is likely to consolidate or decline over the coming years.
Question #5
What are your thoughts on the various cycles and COVID’s impact on disrupting the cycles (for example the 18 year real estate cycle or 4 year cycles). Do you see challenges in 2026 and do you believe in cycles in your work?
The answer to this question is addresed in #7 below.
Question #6
What are your thoughts that we are entering a “blow off top” in stock prices headed into 2026 but a weakening economy will eventually lead to a recession in the next 6-12 months?
The answer to this question is addresed in #7 below.
Question #7
There are signs of drying liquidity with widening bid-ask spreads which have drawn comparisons to the dot-com bust. Based on your studies/experience in cycle analysis, would you characterize this as a late-stage bull market or is the data inconclusive?
Late cycle bull markets, those whose final peaks are not violated for several years, are rare. The last true example of a late cycle peak occurred in NASDAQ in March 2000. That peak held for 16 years. It was only in July 2016 that NASDAQ broke and held above its March 2000 peak. Even the more diversified S&P 500 did not trade and hold above its March 2000 peak for 13 years. Based on pure valuation studies it is within reason to expect similar action at the next bull market peak. However, this really cannot be predicted in advance. Based on studies other than valuation, such as sentiment, margin debt, interest rates, Central bank policy, long term divergences among various major worldwide indexes, the probability of a long-term bear market is greater than usual. However, we find it unproductive to attempt to project long term bear market cycles. We note that the S&P 500 has exhibited declines of -44% (2008-2009), -34% (2020 Covid Crash) -25% (2022-2023) and -18.90% (2025 tariff correction) yet in each instance the market recovered to higher highs. Our investment approach focuses on turning points rather than long-term forecasts. When data signals a possible decline, we reduce equity exposure; when conditions indicate a bottom, we take long positions. The last strong bottom signals appeared in April–May 2025, leading our model to establish a long S&P 500 position on April 4. Despite the potential negatives mentioned
Question #8
As a retail investor I am very confused and I believe that many other are as well. I am member of some macro and technical analysts group. Some of them are bullish and the others are bearish. Both of them solid evidences to support their views. Such as bearish guys says that market valuations are high, yield spreads are very tight, market breath has a divergence, margin debt ATH, lots of uncertainty due to tariff and liquidity probably drain due to TGA refill will going to drain market from now to year end. On the other hand, bullish guys say that market valuations is not as high as dot.com bubble, monetary debasement is ongoing broadly& governments spend more every year, seasonal pattern is bullish from now to year end. And they are all right. But market will go down or up. What is your opinion for financial market for near and long term?
There should be no ambiguity when it comes to the market. The U.S. stock market stands as history’s greatest engine of wealth creation. However, because it sometimes mirrors the broader economy and other times reflects investor sentiment, market prices can fluctuate more dramatically than company earnings and growth would justify. Additional Disclaimers MB EDGE does not recommend individual stocks. Instead, our strategy involves positions in the S&P 500, the largest and broad- est U.S. equity index. Our recommendations are not based on traditional metrics such as valuations, yield spreads, margin debt, seasonal factors, or monetary policy. Rather, we follow proprietary market indicators specifically developed to identify major market bottoms. When these indicators generate a significant sell signal, we exit our S&P 500 position and reallocate to treasury bills using money market funds.