April 7, 2025
The market’s recent movements have been chaotic, with conflicting signals across major indices. Headlines scream “Bear Market,” but the reality is more nuanced. Here’s how to make sense of it all.
The Misleading Broad Market Narrative
The S&P 500 and NASDAQ’s daily results can be deceptive. While they grab attention, the NYSE Composite—a broader measure—was down -1.02% today. That looks worse, but there’s more to the story.
More importantly:
- The NYSE Composite’s high on February 19 was 20,240.39; today’s low was 16,820.12, a -16.9% drop from the peak.
- At today’s close of 17,438.64, it’s -13.8% from its high—nowhere near the -20% threshold defining a Bear Market.
Meanwhile, the NASDAQ Composite paints a different picture:
- Its mid-February high was 20,110.12, and today’s low was 14,784.23, a -26.5% plunge.
- The close was -22.4% from the peak—technically a Bear Market.
But here’s the catch: The Mag-7 stocks make up ~35% of the NASDAQ’s market cap, and they’ve been the biggest drag. The broader market isn’t in a Bear—the Mag-7 are.
The Mag-7 Breakdown: Six Winners, One Distraction
Of the seven tech giants:
- Six (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta) remain outstanding long-term investments.
- Tesla is the outlier—a volatile, meme-driven stock that distracts from real value.
As the broader market continues declining (likely due to technical breakdowns), the public will panic and sell Mag-7 stocks at discounts. Meanwhile, smart money—who deemed these stocks overpriced in mid-February and wanted to buy them at lower prices—will accumulate them at prices they wanted.
Once the broad market exhausts its downward momentum, HB&B—with Jamie Dimon waving the green flag—will declare it’s time to buy. But by then, the smart money will have already loaded up on the “Mag-6,” leaving retail investors chasing speculative assets like Tesla, meme stocks, and Crypto.
The Smart Money’s Playbook
This isn’t random. There’s a deliberate shift happening:
- Trump’s pro-Crypto rhetoric aligns with the smart money’s agenda—diverting public attention away from the greatest wealth-building stocks of our lifetime (i.e., the Mag-6) toward speculative, high-risk assets (e.g., Crypto).
- Fact: the Mag-6 compound real wealth; Crypto does not. Every sovereign wealth fund in the world, and Buffett too, is invested in the Mag-6. For good reason.
What Comes Next?
- The broad market (NYSE) still has room to fall before hitting Bear territory.
- The NASDAQ’s Bear conditions are concentrated in the Mag-7.
- The Mag-6 will bottom before the broader market does—watch for long-term cycle reversals.
- Smart money is accumulating; retail is panicking.
Final Thought
When the financial media finally signals a buying opportunity, the best stocks will already be in strong hands. The time to watch for Mag-6 opportunities is now—before the crowd catches on.
Stay disciplined. Ignore the noise. Be a critical thinker. And when the real Bull returns, you’ll be positioned where it matters.