Market and "Walrus": How long can you hold a position during systemic disharmony

A few days ago, the S&P 500 index closed its trading session above the 7,000-point mark for the first time. The news was met with optimism and was seen as confirmation of economic recovery. However, a parallel analysis of the charts reveals a troubling picture: at the same time as the US stock indices are rising, precious metal prices are gaining strength. Such synchronization disrupts the basic logic of financial markets and indicates something more than just positive economic signals.

Bearish Divergence: When the Numbers Contradict the Trend

The technical picture of the S&P 500, Nasdaq, and Dow Jones shows clear signs of divergence. On weekly and daily timeframes, a classic bearish divergence is visible — when new price highs are not confirmed by corresponding highs in technical indicators. This is a classic warning signal. The situation is complicated by gold and other precious metals forming their own historical highs simultaneously. The rebuilding of support and resistance lines indicates an acceleration in movement, but the direction of this acceleration remains uncertain.

The market is functioning like a “walrus” on the edge of an ice floe — it can bounce in any direction, and the energy has accumulated significantly.

Dollar Devaluation: Explaining the Paradox

The only logical explanation for the simultaneous rise in stock indices and gold prices is a large-scale devaluation of the US currency. When the dollar loses purchasing power, all assets quoted in dollars nominally increase in price. This applies to both stocks and gold. In such a devaluation spiral, the Federal Reserve’s decision to keep rates unchanged appears paradoxical and raises serious questions.

Experts note that such a situation requires either tightening monetary policy or acknowledging hidden inflation. The lack of decisive action could lead to the accumulation of macroeconomic imbalances, which the market will be forced to correct sharply and painfully.

Cryptocurrency Paradox: When BTC Loses Its Anchor

A particular concern is the behavior of Bitcoin. At the current price of $71.39K (down 6.63% over the last 24 hours), the cryptocurrency is losing ground along with the dollar, demonstrating a high correlation with traditional financial assets. This casts doubt on BTC’s positioning as a hedge against currency devaluation.

When the market corrects, all “margins” — traders trying to hold short positions — will face the need to make decisions. As investor Michael Burry rightly noted, a market crash can be anticipated, but the position is often closed before the main trend develops. No one knows the exact date of the collapse — it could be tomorrow or in several years — but the accumulated potential for imbalance does not disappear.

Outlook and Conclusions

The situation in the markets resembles a stretched spring. The structure of divergences, the behavior of precious metals and cryptocurrencies, and the dollar’s devaluation are all components of an upcoming correction. The scale of a potential crash could surpass the consequences of the 2008 financial crisis, when the mortgage market collapsed and a wave of bank bankruptcies ensued.

Preserving capital in such an environment remains a challenging task. Traditional hedging tools are losing effectiveness. The market is preparing for an asset revaluation, and each trader’s “walrus” — their ability to hold their position until the moment of truth — will be a decisive factor in the upcoming volatility.