The Market In 8 Charts

Dear Fellow Trader:

Well, we’re through the long weekend. I’m sitting poolside today watching my daughter dive into the pool. The fact that July 4 has passed has already prompted back-to-school sales. I’m dizzy thinking about that… I still have a lot to do this summer.

Like teaching people about Tesla stock and why it’s really the only thing they need to trade to fully understand the global markets and trading. The SIX-WEEK Bootcamp starts on Tuesday. Don’t miss it.

That said, it’s that time of the week that we look forward and backward.

This is the market in EIGHT charts…

Chart 1: This Is Your Brain on Bubble Logic

Let’s start with the headliner.

Here’s the Shiller P/E chart that’s making the rounds like a bad TikTok dance.

We’re paying $38 for every dollar of actual earnings over the past decade.

StockMarket.News

But here’s the thing… As I’ll explain this week, valuations no longer matter like they did in the pre-2008 ERA.

Instead, we have to focus on liquidity… and that more money in the system will drive these stocks higher, especially with the sheer amount of passive investing taking over this world.

The chart tells us we’ve only been this expensive 4% of the time in history.

Some people will call that a warning. I’ll call it what it is – confirmation that this time is different when $21.94 trillion in money supply is looking for somewhere to go.

Chart 2: The “Crash” That Wasn’t

Here’s a delicious piece of revisionist history.

People are asking who remembers the “crash” of 2025.

Source: @brewmarkets

Look at that S&P 500 chart… It’s a green line going up with the enthusiasm of a golden retriever chasing a tennis ball.

As I’ve mentioned before, the M2 expanded, and insiders bought in big on April 8-10.

We continue to have strong momentum despite all the clear warning signs that something bad will probably happen in the next three years.

This is a trader’s market. Some people will call that resilience.

I’ll call it what it is, a market that’s forgotten how to fall because every dip gets bought by passive flows and insiders as the liquidity base continues to expand.

Chart 3: When Fear Takes a Vacation

The VIX chart is my personal favorite.

We’re at the lowest close since February 2020… You know, right before that little “oopsie” moment when the world realized pandemics still existed.

When the fear gauge is this low, it’s not measuring calm… it’s measuring complacency.

Source: Charlie Bilello

And complacency, my friends, is the market’s way of setting us up for a surprise party nobody wants to attend.

Chart 4: Follow the Smart Money

Hedge funds are buying financial stocks at the fastest pace since 2016. Remember, I said that the DPST cracked its 20-day moving average on June 23.

Charlie Bilello

Regional banks are roaring because people expect reform.

And when that reform comes, look for the bank stocks to selloff.

This is all about positioning…

These aren’t your typical retail day traders with Robinhood accounts.

These are the folks who get paid millions to buy the rumor and sell the news.

By the time banking deregulation hits, they’ll be long gone.

Chart 5: Meanwhile, Across the Pond…

The UK is giving us a masterclass in “How to Spook Bond Markets 101.”

Those gilt yields are jumping. When bond traders start pricing in political chaos, you know someone’s about to get a very expensive education in fiscal reality.

Bloomberg, HolgerZ

“Another Liz Truss Moment” coming?

That’s a phrase that should strike fear into any finance minister’s heart.

Chart 6: The Money Printer Goes Brrr (Again)

Want to know why we’re back at all time highs?

This chart… Full stop.

GMSM

US M2 money supply just hit a record $21.94 trillion.

We’re printing money faster than a counterfeiter with a deadline, and somehow we’re surprised that asset prices keep inflating like a beach ball in a hurricane.

The chart shows we’ve now surpassed the March 2022 record of $21.86 trillion.

It’s only heading higher…

Chart 7: The Debt Ceiling Theater

It’s really all about the debt ceiling…

We’re planning to raise it another $5 trillion to $41 trillion.

BoA

That BofA chart titled “Stick a pork in it!” tells the whole story.

Look at that exponential curve shooting straight up toward 2032.

The sky is the limit… literally.

When your debt projections look like a hockey stick, you know somebody’s math has gone seriously wrong. This doesn’t end well…

Chart 8: The Math That Doesn’t Add Up

Finally, that Social Security chart should keep every politician awake at night.

We went from 159 workers supporting every retiree in 1940 to less than 3 workers today. It’s like playing musical chairs, except someone keeps removing chairs while adding more players.

Source: Peter Mallouk

Some people refer to this as a demographic transition.

I’ll call it a Ponzi scheme that ran out of new investors.

The Bottom Line

These charts are telling us a story… and it’s not the story Wall Street wants you to hear.

We’re living in a world where:

Valuations are at historic extremes, but liquidity trumps everything
Fear has gone on permanent vacation
Smart money is making big positioning bets ahead of policy changes
Governments are printing their way out of problems at a record pace
The math behind our biggest social programs has broken down
Every “crash” gets a bailout…

Remember: Trade the momentum. Follow the liquidity. Watch for the positioning shifts.

And when the music finally stops… make sure you’re not the one left standing.

To be successful with this strategy… all you need is Tesla.

Stay liquid,

Garrett Baldwin

Update your email preferences or unsubscribe here

© 2025 Disclaimer: Neither TheoTrade or any of its officers, directors, employees, other personnel, representatives, agents or independent contractors is, in such capacities, a licensed financial adviser, registered investment adviser, registered broker-dealer or FINRA|SIPC|NFA-member firm. TheoTrade does not provide investment or financial advice or make investment recommendations. TheoTrade is not in the business of transacting trades, nor does TheoTrade agree to direct your brokerage accounts or give trading advice tailored to your particular situation. Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction or investment.Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past Performance is not necessarily indicative of future results.

PO Box 24790
Christiansted, Virgin Islands 00824, United States of America

Re: Our communities need us

27% Off Mind-Blowing Highs 🧨

RJ Hamster