Pricewise
The low-beta stock index $DJTLAB has marked out a clear peak. That top coincided with our volatility model flashing panic buying at the end of 2024. That peak lead to a 20% decline in the low-risk segment, making a low with all the markets on April 7, 2025.
Since then, price action has been feeble failing to make new highs and today our adaptive moving average systems is producing a textbook trend-following sell signal.
In market terms, when the supposedly “safe” stocks roll over, it is more than a rotation story. Low-beta leadership tends to embody risk aversion, capital flowing to the defensive core. A failure there suggests that even the conservative bid has exhausted itself. It’s the market’s equivalent of the “sun going down” — once the defensive line breaks, broader weakness is rarely far behind.
That fits with the bearish divergences seen with the internals, like the A/D ratios. Also, from a contrarian indicator reflects that only the riskiest of investments is preferred by the market, not a good signal either.
Historically, a top in the low-beta index precedes either outright declines in the averages or a sharp spike in volatility as investors shift away from their last refuges. Today’s setup fits that script. The background has clearly flipped from euphoric FOMO to outright take a risk at any cost mode, and our systems confirm with sell signals.
The warning is plain: if the low-beta index is done, the rest of the market is vulnerable.
New trade ideas in today’s “Volatility Reports.”
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