A MAJOR market signal has just flashed This also happened in the...
Bravos Research@bravosresearch
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Apr 08, 2025
~5 min read
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A MAJOR market signal has just flashed
This also happened in the 2022, 2020, & 2008 crashes
Each of them marked a significant buying opportunity
A thread 🧵
This also happened in the 2022, 2020, & 2008 crashes
Each of them marked a significant buying opportunity
A thread 🧵
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2/ The US stock market is in full panic mode
In our last YouTube video, we said there was still plenty of short-term downside risk
Which is why we removed most of our exposure to US stocks during the recent bounce
In our last YouTube video, we said there was still plenty of short-term downside risk
Which is why we removed most of our exposure to US stocks during the recent bounce
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3/ Now yes, the stock market is starting to reach an extreme point of fear and capitulation
But we don’t think stocks are quite out of the woods yet
One reason is a signal that triggered this week
Which also appeared at the start of the 2022, 2020, and 2008 crashes
But we don’t think stocks are quite out of the woods yet
One reason is a signal that triggered this week
Which also appeared at the start of the 2022, 2020, and 2008 crashes
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4/ This isn’t doom and gloom, it’s a real signal that just triggered
And we’re factoring this into our analysis
We’re going to walk you through the key nuances you need to consider
And how we’re approaching this signal with our clients at Bravos Research
And we’re factoring this into our analysis
We’re going to walk you through the key nuances you need to consider
And how we’re approaching this signal with our clients at Bravos Research
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5/ By the way, if you want to follow our exact trading strategy, make sure to watch our latest Premium Video
We send real-time Trade Alerts on stocks, commodities, and cryptos
In 2024, we’ve averaged a 16.65% profit and just a 3.67% average loss
Join us now at:
bit.ly/BravosResearch
We send real-time Trade Alerts on stocks, commodities, and cryptos
In 2024, we’ve averaged a 16.65% profit and just a 3.67% average loss
Join us now at:
bit.ly/BravosResearch
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6/ Before I show you exactly what this signal is, we first have to understand the nature of this stock market decline
For that, let’s add in Treasury bond yields
This matters because bond yields reveal what the market is worried about
So whether that’s inflation or slowing economic growth
For that, let’s add in Treasury bond yields
This matters because bond yields reveal what the market is worried about
So whether that’s inflation or slowing economic growth
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7/ As you can see, bond yields have been declining alongside the stock market during this correction
That tells us financial markets are currently more concerned about slowing growth, due to Trump’s tariffs
That’s very different from 2022, when yields were rising as inflation was the key concern
That tells us financial markets are currently more concerned about slowing growth, due to Trump’s tariffs
That’s very different from 2022, when yields were rising as inflation was the key concern
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8/ The current sell-off looks much more like what we saw in 2020
When bond yields also fell as investors priced in weaker economic growth during the pandemic
This distinction matters because growth-driven sell-offs tend to be much more violent
When bond yields also fell as investors priced in weaker economic growth during the pandemic
This distinction matters because growth-driven sell-offs tend to be much more violent
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9/ We’ve highlighted every market decline since 2008 that was triggered by lower growth expectations
The good news: most didn’t result in a recession
The bad news: they were still violent, with 2 non-recession drops over 20%
The good news: most didn’t result in a recession
The bad news: they were still violent, with 2 non-recession drops over 20%
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10/ This is the index that measures S&P 500 volatility (VIX)
And in every one of those growth-related declines, the VIX spiked above 35
And in every one of those growth-related declines, the VIX spiked above 35
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11/ One thing we’ve been highlighting since this correction began is that the VIX hadn’t hit an extreme panic level
We hadn’t yet seen the kind of fear and capitulation that typically are seen near a bottom
We hadn’t yet seen the kind of fear and capitulation that typically are seen near a bottom
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12/ Believe it or not, we just got that on Friday
VIX has now spiked above 36
Indicating the market is finally hitting the extreme fear zone we’ve seen in past corrections
VIX has now spiked above 36
Indicating the market is finally hitting the extreme fear zone we’ve seen in past corrections
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13/ It’s during moments like these that stocks can see significant damage in a short time as real capitulation sets in
That’s why we remain in a defensive posture at Bravos Research
We’re not trying to nail the bottom
But these volatility spikes often bring long-term buying opportunities
That’s why we remain in a defensive posture at Bravos Research
We’re not trying to nail the bottom
But these volatility spikes often bring long-term buying opportunities
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14/ Now, this brings us to the signal that just triggered, one we also saw in 2022, 2020, and 2008
It’s based on the gold-to-silver ratio
This is a tool we closely watch to gauge whether markets are in “risk-on” or “risk-off” mode
It’s based on the gold-to-silver ratio
This is a tool we closely watch to gauge whether markets are in “risk-on” or “risk-off” mode
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15/ This is what the gold-to-silver ratio looks like since 2020
It just broke out above a major basing pattern that had been forming since 2022
This is a risk-off signal, showing traders are moving away from the more volatile silver and into gold
It just broke out above a major basing pattern that had been forming since 2022
This is a risk-off signal, showing traders are moving away from the more volatile silver and into gold
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16/ In April 2022, we saw a similar breakout in the gold-to-silver ratio
This was right at the start of the 2022 bear market
With stocks falling another 20% from that point
This was right at the start of the 2022 bear market
With stocks falling another 20% from that point
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17/ We also saw a major breakout at the end of February 2020
This was sharp move above a multi-month base in the gold-to-silver ratio
This was sharp move above a multi-month base in the gold-to-silver ratio
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18/ That breakout came right at the start of the COVID crash
With stocks dropping another 25% from that moment
With stocks dropping another 25% from that moment
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19/ Now let’s rewind to 2008
We saw another similar breakout in the gold-to-silver ratio in early August
This was just before the S&P 500 by fell another 50%
We saw another similar breakout in the gold-to-silver ratio in early August
This was just before the S&P 500 by fell another 50%
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20/ So this raises the question: are we on the edge of a much larger decline in US stocks?
And possibly heading into recession?
A 2025 recession hasn’t been our base case
And we’ve seen plenty of deep corrections without one
And possibly heading into recession?
A 2025 recession hasn’t been our base case
And we’ve seen plenty of deep corrections without one
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21/ We also believe we’re getting close to an extreme state of market panic right now
Of course, we may be underestimating the immediate impact Trump’s tariffs could have
They do carry the potential to trigger a 2025 recession
Of course, we may be underestimating the immediate impact Trump’s tariffs could have
They do carry the potential to trigger a 2025 recession
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22/ But we’re not economists, we’re traders
Our job is to position correctly in any environment
Our job is to position correctly in any environment
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23/ As mentioned earlier, we believe the market is now at an extreme panic point
This isn’t the time to go all-in short
Instead, it’s the time to start scanning for quality buying opportunities at steep discounts
This isn’t the time to go all-in short
Instead, it’s the time to start scanning for quality buying opportunities at steep discounts
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24/ Even if we are heading into a recession, the path won’t be a straight line down
There will be rallies and opportunities to sell or go short
You can view all our closed 2024 trades for FREE on our homepage at:
bit.ly/BravosResearch
There will be rallies and opportunities to sell or go short
You can view all our closed 2024 trades for FREE on our homepage at:
bit.ly/BravosResearch
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25/ Thanks for reading!
If you enjoyed this thread, please ❤️ and 🔁 the first tweet below
And follow @bravosresearch for more market insights, finance and investment strategies
If you enjoyed this thread, please ❤️ and 🔁 the first tweet below
And follow @bravosresearch for more market insights, finance and investment strategies
Bravos Research@bravosresearch
A MAJOR market signal has just flashed
This also happened in the 2022, 2020, & 2008 crashes
Each of them marked a significant buying opportunity
A thread 🧵
This also happened in the 2022, 2020, & 2008 crashes
Each of them marked a significant buying opportunity
A thread 🧵
