Before I get into what the biggest risk for the markets this year is, that no one is talking about with you, let’s quickly look at some charts, because a lot of stuff happened in the markets last week.

Now the S&P 500 came into this week coming after a big one day drop two Friday’s ago.

That big one decline of the other week was associated with selling in “AI” related stocks.

The S&P 500 fell to its 50-day moving average and the VIX went up last week, tapping on 29 Friday, before closing that day below 21.

It looks to me like the US stock market is trying to stabilize at this level and is likely to go sideways for a few weeks here.

I don’t think it is topping here or heading into a bear market before this year is over, unless a sudden risk emerges, more on that in a bit.

One thing, though, that is happening, is that money is flowing out of some sectors and into ones that are more “safety plays.”

For instance, regional bank stocks got hit on lending concerns over loans to private equity companies. You can see this in the IAT regional bank stock ETF.

Meanwhile, utility stocks have been among the best performing sectors of the market, a sector known for stable earnings and dividends no matter what the economy does, and one that tends to rise when the Federal Reserve lowers interest rates.

Of course, we have also been seeing an epic run in gold, silver, and precious metals.

Silver hit an all-time high last week, before pulling back on Friday, while gold closed the week above $4200 an ounce.

The GDX gold stock ETF also took a hit on Friday, but look at how much it has gone up in the past six weeks.

It looks like the metals complex is going to consolidate its gains here for a few weeks too.

Now, as far as the biggest risk it is that the Israel/Iran cease-fire ends and that war breaks out in the Middle East. If it does it will end up being in a bigger conflict, that would likely cause oil prices to rise and could even drag the United States into it, if President Trump proves incapable of saying no.

I have linked a few articles below about this topic.

-Mike

Like Playing Moneyball with Your Stock Picks

The data that actually moves markets:

• Congressional Trades: Pelosi up 178% on TEM options

• Reddit Sentiment: 3,968% increase in DOOR mentions before 530% in gains

• Insider Activity: UNH execs bought $31M before Buffett joined

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Crash Expert: “This Looks Like 1929” → 70,000 Hedging Here

Mark Spitznagel, who made $1B in a single day during the 2015 flash crash, warns markets are mimicking 1929. Yeah, just another oracle spouting gloom and doom, right?

Vanguard and Goldman Sachs forecast just 5% and 3% annual S&P returns respectively for the next decade (2024-2034).

Bonds? Not much better.

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