Keeping An Eye On The MAG 7

1.) MOVE INDEX – I’ve commented a number of times about the MOVE Index, which tracks bond market volatility, and the importance of it being “calm.” Right now, it is not so calm at 115, suggesting the $30 trillion US Treasury market is showing signs of strain. But it is also nearing strong resistance within its downtrend that has been in place since March 2023. The last time it reached this level of downtrend resistance was April 7, 2025…which was also a great time to be a stock investor. The old Buffett adage… “buy when there’s blood in the streets.” No one in market space or policy space wants to see market rates (2YR – 30YR) get out of control. Those market rates are all signaling overbought right now (as is the MOVE Index), but are doing so within fairly fresh upside breakouts too. What does that mean? We probably won’t see a major shift down in rates until the bond market sniffs out a “recession.” So far, that is also not the case.

2.) GOLD – Gold is currently down about 18% from its highs in January, after being down as much as 24.3% at its lows. Lots of people have wondered why! Well, it seems Turkey sold or swapped 58 tons of gold in just two weeks to March 20th. That likely had a large effect on the price of gold. That said, gold’s fundamentals are still pretty strong, but the technical aspect of gold still has a lot of damage to overcome. If an investor can be patient and wants to buy gold, it's probably getting near a spot that could make sense. But a failure at $4725 would not be good as it would likely resume its downtrend. In other words, gold is still likely to be very volatile here.

3.) MAGS – The Magnificent 7 haven’t been so magnificent lately! The Magnificent 7 represents roughly $20 trillion in market cap. The entire U.S. stock market is about $60 trillion. So a third of the market is tied up in these seven names. Instead of leading, they’ve been moving out of sync with the rest of the market. Is that potentially changing? The 100-day correlation between the equal-weight S&P 500 and the Mag 7 just hit its most negative level since 2023, which, of course, would have been a good time to buy! On top of that is institutional ownership. Right now, they are underweight these names. The data shows that when the institutions are underweight this class, it tends to lead to statistically significant positive returns vs. times when the institutions are overweight the MAG7 names. A reversal upward near here would be super positive for overall market structure, whereas a failure near here would not be so great.