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08/17/2026

Record Highs Don’t Always Mean a Market Top

Based on data from 1990 to 2025, the Nasdaq 100’s 19th new high of the year — reached on June 2 this year — has historically been followed by positive average and median returns across every measured horizon, from 20 to 250 trading days.

The subsequent gains ranged from 0.4% to 30.9%, while the probability of a positive return over these periods ranged from 71% to 93% (Figure).

In other words, clusters of record highs have not historically signaled an imminent reversal. On the contrary, the evidence suggests that momentum has typically persisted, with the index maintaining a high probability of further gains over the following months—and, in some cases, into the next year.

Historical patterns are never a guarantee of future performance. Still, with the Nasdaq 100 continuing to set record highs, the June peak appears more likely to have been an interim high rather than the terminal peak for the year.

08/15/2026

Nasdaq 100’s June High May Be a Waypoint, Not the End

The Nasdaq 100 has staged a V-shaped recovery in tandem with the S&P 500 since late last month, gradually retracing toward its all-time high. Year to date, however, the index has materially underperformed the S&P 500 and has yet to establish a new record high. Nevertheless, when viewed through the lens of the historical seasonal timing of annual peaks, the outlook for the Nasdaq 100 remains constructive.

Data covering the 41-year period from 1985 to 2025 show that the Nasdaq 100’s annual high occurred in December on 19 occasions, accounting for 46% of the sample. October and November each recorded five instances. In aggregate, the annual high was established during the fourth quarter in 29 of the 41 years, or approximately 70.7% of the time (Figure 1). By comparison, this year’s intra-year high was reached as early as June—a pattern observed only once in the entire 41-year dataset, representing just 2% of the sample.

From a seasonal perspective, these findings suggest that the June high is unlikely to represent the ultimate peak for the year. Rather, historical patterns indicate that the probability of the Nasdaq 100 setting a fresh high during the fourth quarter remains relatively elevated.

A separate statistical analysis provides further support for this view. Based on data from 1990 to 2025, the Nasdaq 100’s 19th new high of the year — reached on June 2 this year — was followed by positive average and median returns over all measured horizons, ranging from 20 to 250 trading days, with gains of between 0.4% and 30.9%. The probability of a positive return over these periods ranged from 71% to 93% (Figure 2).

In other words, clusters of record highs have not historically signaled an imminent reversal. Instead, the historical evidence suggests that momentum has typically persisted, with the index retaining a high probability of further gains over the ensuing months and, in some cases, into the following year.

Historical patterns, of course, provide no assurance of future performance. Nevertheless, when historical seasonality is considered alongside the performance profile following repeated record highs, the June peak appears more likely to represent an interim high rather than the terminal peak for the year. With the historically stronger fourth quarter approaching, the potential for the Nasdaq 100 to establish a new record high—and potentially extend its advance further—remains a scenario that warrants a constructive outlook.

08/09/2026

U.S. Equities Face Rising Seasonal Volatility Ahead of the Midterm Elections

From the perspective of the full-year average trend in market volatility indicators, U.S. equities typically tend to experience an expansion in volatility after entering August. The VIX Index, which reflects market expectations for volatility, shows a clear pattern of seasonal rebound. This is particularly evident in U.S. midterm election years, when the VIX often begins to rise intermittently from mid-August, with the uptrend typically extending until around mid-October before peaking and retreating.

This suggests that over the coming months, U.S. equities may face two simultaneous headwinds: a seasonal increase in volatility and heightened uncertainty surrounding the midterm elections. Given that the VIX usually exhibits a negative correlation with major equity indices, an expansion in volatility often reflects rising market risk aversion and may also be accompanied by increased pressure for equity market pullbacks.

As such, investors may need to adopt a more cautious stance toward U.S. equities in the coming months, particularly as seasonal volatility pressures coincide with rising election-related uncertainty.

08/02/2026

What’s Next for the Hang Seng Index After a Record-Breaking July?

The Hang Seng Index just delivered its best July performance on record, posting an impressive 13.1% MoM gain. Following this massive rally, what lies ahead for the market in the coming months?

From a historical seasonality perspective over the past 35 years, August and September are traditionally weaker months for the Hang Seng Index, with pullbacks being more distinct during US midterm election years (like this year). Data shows that in midterm election years, the index usually remains under pressure through August and September, often hitting its YTD low near the end of September (see Chart).

Market sentiment typically improves in Q4, with the index frequently rebounding in October. However, in midterm election years, the rally in November and December tends to be more modest, leading to sideways consolidation rather than another rapid surge.

Naturally, historical patterns serve only as statistical guidance, not guarantees. Whether the market repeats history this year remains to be seen. Nonetheless, following July’s robust gain of over 10%, even if short-term profit-taking and consolidation occur, it should be viewed as a healthy and normal market development.

07/12/2026

Robust ETF Inflows Underpin the U.S. Equity Rally

Since the beginning of the second quarter, capital inflows into U.S. equities have accelerated at an exceptional pace, reaching seasonal highs not seen in more than a decade. An analysis of the 20 largest U.S. equity ETFs by assets under management shows a sharp acceleration in fund inflows following the start of Q2. Combined cumulative net inflows into these ETFs surged from approximately USD 6 billion at the end of the first quarter to around USD 224 billion as of earlier this month.

In other words, nearly USD 220 billion of net new capital has flowed into these funds in just three months, marking the strongest inflow for the same period in more than a decade (Figure). From a historical perspective, the current year-to-date total already ranks as the fourth-largest annual inflow on record, surpassed only by the full-year totals of 2024, 2025, and 2021. Should the current pace persist, 2026 is on track to set a new all-time record for annual ETF inflows. The data suggest that the second-quarter rally in U.S. equities—particularly in the technology sector—has been underpinned by exceptionally strong institutional and retail capital inflows, creating a market environment in which liquidity, price appreciation, and investor participation have reinforced one another.

06/29/2026

Shifting Tides in Southbound Capital and the Key Support Level for the HSI

During the 2024–2025 period, Southbound Stock Connect flows saw exponential growth, recording historic net inflows of HKD 800 billion and HKD 1.4 trillion—representing YoY increases of 1.5x and 3.4x. This immense influx of capital was the primary catalyst behind the Hang Seng Index’s (HSI) strong downside protection and upward momentum.

However, the current year tells a different story. The rhythm of mainland inflows has decelerated significantly. Year-to-date net Southbound inflows total roughly HKD 300 billion, effectively halved compared to the same period last year and trailing the YTD figures of 2024, 2021, and 2020. This suggests a distinct moderation in risk appetite for new capital deployments.

Analyzing the capital cost structure provides a clear technical roadmap. Based on flow data from 2024 to the present, and assuming full allocation to the HSI or the Tracker Fund (02800.HK), the weighted average cost basis for these positions is currently estimated at the 23,000 level [Figure].

Should the index fall meaningfully below this watermark, the mainland capital accumulated over the last two years will slip into unrealized losses. Consequently, capital flow dynamics dictate that the 23,000 mark will trigger intense market friction, likely providing substantial structural support for the HSI in the near term.

06/22/2026

What History Tells Us About Bitcoin's Current Bear Market

Despite the hype, Bitcoin has heavily underperformed across nearly ...

06/14/2026

AI Euphoria Meets Historic Leverage: How Close Are We to a Market Turning Point?

Recent data from FINRA point to a notable shift in investor behavior, with U.S. equity margin debt surging to a record $1.3 trillion as of April. This represents a 53% increase from a year earlier, the fastest rate of growth since May 2020, highlighting a sharp rise in risk appetite as investors increasingly employ leverage to amplify returns.

More importantly, margin borrowing is now expanding far faster than the M2 money supply, a key measure of market liquidity. As a result, the Margin Debt to M2 ratio has climbed steadily to 5.72%, a level that places leverage conditions firmly within territory previously associated with major market turning points. The ratio has already surpassed the 5.69% peak recorded in July 2007, just months before the onset of the Global Financial Crisis, and now stands only 0.7 percentage points below the all-time high of 6.4% reached in March 2000 at the height of the dot-com bubble.

While elevated leverage alone does not trigger financial crises, history suggests that periods in which leverage grows substantially faster than underlying liquidity often leave the financial system increasingly vulnerable. When borrowing becomes excessively detached from liquidity growth, market resilience tends to weaken, making asset prices more susceptible to external shocks. Any meaningful correction can then be amplified by margin calls, forced selling, and rapid deleveraging, creating a self-reinforcing downward cycle.
Against this backdrop, the return of the Margin Debt to M2 ratio toward historic extremes may signal a gradual buildup of systemic risk beneath the market's surface. This concern is further amplified by the ongoing boom in artificial intelligence-related investments and increasingly stretched valuations across parts of the technology sector. Should industry leaders such as OpenAI and Anthropic pursue public listings in the coming months, such landmark offerings could further fuel investor enthusiasm, attract additional speculative capital, and push leverage conditions even closer to levels last seen during previous market peaks.

The key question for investors is whether these developments mark the beginning of a new era of structural growth driven by transformative technologies, or whether they represent the late stage of a highly leveraged market cycle approaching a period of correction and deleveraging. In the months ahead, the interaction between leverage and liquidity may prove to be one of the most important indicators for assessing the sustainability of the current bull market.

06/08/2026

Honoured to take home two Builder Awards (Canada & Worldwide) at the Financial Hall of Fame in Anaheim this week! 🏆🌎

These awards mean the world to me because they celebrate the impact of leadership and team building. When I started in this industry, I never imagined where it would lead, but the incredible people around me made it possible.

Thank you to my family, my clients, and the entire team for your unwavering support. Back to work doing what I love helping our clients and partners achieve their biggest goals. Let’s keep building! ✨📈

06/07/2026

📊 The Return of the US Leverage Boom: Is a Historical Warning Signal Flashing Again?

Before last Friday’s (5/6) sharp pullback, US equities had been enjoying a remarkable rally. After surging 10.4% in April, the S&P 500 gained another 5.2% in May. Beneath this optimism-driven advance, however, a key risk indicator is quietly approaching a historical danger zone: margin debt.

As stocks continue to reach new highs, investors are increasingly relying on leverage to amplify returns. Not surprisingly, market participants expect the upcoming May margin debt data to show a further acceleration in year-over-year growth.

⚠️ A Historical Pattern Worth Watching

History suggests that rapid growth in margin financing can be a double-edged sword. When margin debt growth rises to extreme levels, particularly above 50% year-over-year, and subsequently falls back below that threshold, it has often marked an important turning point in market cycles.

Since 1997, this signal has appeared only four times:

🔹 April 2000 — before the Dot-Com Bubble burst
🔹 August 2007 — before the Global Financial Crisis
🔹 July 2021 — following the post-pandemic liquidity surge
🔹 April 2026 — the current cycle

In each of the first three cases, the S&P 500 initially moved sideways or weakened before experiencing a meaningful correction within the following 12 months.

📉 The Real Warning Sign

The concern is not that margin debt has reached a record high. Rather, the key risk emerges when its growth rate peaks and begins to decelerate. A slowdown in margin debt growth suggests that the influx of new leveraged capital is losing momentum. Historically, this has often coincided with a weakening of the market's upward trend.

Margin debt growth currently stands at 53% year-over-year. If it retreats from current levels and falls back below the 50% threshold in the months ahead, historical precedent suggests that the risk of a significant S&P 500 correction over the following year could rise materially.

For investors focused on the next phase of the market cycle, this is a leading indicator that deserves close attention.