Wmax believes that the current U.S. stock market is at aDenominator-side interest rate cut expectations are overdrawn ahead of schedule与Molecular technology oligopoly profit monopolyIn the extreme bull market driven by dual forces. Amid the historic carnival that saw the S&P 500 break through 7,100 points and the Nasdaq index reach 24,000 points, the market is facing triple hidden worries: valuations completely deviate from fundamentals, trading structures are extremely distorted, and capital games are seriously misaligned. Through multi-dimensional cross-validation of the macro cycle, valuation system, chip structure and derivatives market, the Wmax team determined that the current market error tolerance has been compressed to a historical low, and the risk of blindly chasing highs is far greater than the potential returns. The optimal strategy is to give up the obsession with top forecasts, hold on to the bottom line of cash flow, and wait patiently for deterministic opportunities after volatility returns.

Macro double-wheel resonance: the essential logic of short squeeze market

The current short-squeeze trend in U.S. stocks that far exceeds market expectations is not due to the comprehensive recovery of the real economy, but the perfect resonance between liquidity expectations and technology monopoly power. This is also the core driving logic that Wmax has continued to emphasize since the beginning of 2026. From the denominator side, the market's strong bets on the Federal Reserve's interest rate cuts within the year continue to lower expectations for long-term U.S. bond yields. The forward guidance of falling risk-free interest rates has greatly amplified the duration value of growth stocks, forcing incremental funds to concentrate in highly elastic technology sectors, providing liquidity for high valuation pricing of technology giants.

从分子端来看，以 AI 为核心的科技七巨头展现出了碾压式的盈利垄断能力。一季度超预期的利润增速，印证了其在算力壁垒、数据生态及产业链话语权上的绝对护城河。 However, this kind of earnings growth shows the characteristics of extreme "head concentration". It is essentially a dimensionality reduction attack by the technology oligarchs on the remaining 495 S&P constituent stocks, rather than an improvement in the fundamentals of the entire market. Wmax 特别指出，“宽货币预期 + 窄盈利面” 的组合，在历史上极易催生资产价格的 “尖顶” 结构。 The current market has overdrawn the benefits of at least 2-3 interest rate cuts in advance, and any signal that monetary policy is turning less than expected may trigger a rapid correction in valuations.

Valuation has reached its peak: three classic indicators sound the alarm

Valuation bubbles divorced from fundamentals will eventually return. The three core valuation indicators tracked by Wmax have all exceeded historical warning thresholds, sending clear risk signals:

1. Shiller price-to-earnings ratio (CAPE) approaches historical extremes: The current indicator has soared to 39.5 times, not only far exceeding the long-term historical average of 17 times, but also approaching the extreme levels before the Great Depression in 1929 and the bursting of the Internet bubble in 2000. A review of historical data shows that when CAPE exceeds 35 times, the excess returns of U.S. stocks in the next 1-3 years are almost completely wiped out.
2. Buffett indicator hits record high: The ratio of the total market capitalization of U.S. stocks to U.S. GDP has soared to 223%, significantly exceeding the 200% "high-risk warning line" set by Buffett, which means that asset prices have seriously diverged from the output of the real economy.
3. The absolute valuation space has been completely swallowed up: The overall rolling price-to-earnings ratio of the S&P 500 has reached 30.78 times, which is at the 86.7% of history. The high valuation has overdrawn the performance growth expectations in the next few years in advance.

Alienation of market structure: from chip exchange to abnormal volatility

The most alarming feature of this round of new highs for U.S. stocks is the extreme distortion of market breadth and the overall abnormality of trading signals. The Wmax team combined the latest market data and cross-validation of Bank of America Global Research and found that the current market is in a typical "end-of-bubble" characteristic stage. The madness in the derivatives market further proves the irrationality of emotions. The ratio of put-to-call option volume on the S&P 500 fell below 1 last week for the first time since November 2019, according to CBOE data, indicating that fear of upside has completely outweighed concerns of downside. Wmax emphasized that the high valuation level supported by retail liquidity and option leverage can easily trigger a chain stampede once any external catalyst appears.

On the one hand, the exponential boom presents an extreme illusion of “one-nine-nine-fold”.标普 500 虽走出 30 年罕见的 13 连阳，但仅有 5% 的个股同步创新高，前五大权重股贡献了指数 100% 的涨幅，其余 495 只成分股对指数几乎无贡献。与此同时，筹码正在完成一场史诗级的交换：华尔街机构及系统性基金正悄然进行千亿级别的获利了结，并持续降低组合杠杆；而散户看多比例飙升至 46% 的一年高点，大量散户资金在 FOMO 情绪驱使下疯狂接盘。

On the other hand, Wmax noticed a very alarming anomaly: The Nasdaq 100 has moved higher in tandem with 10-day realized volatility on 14 of 16 trading days. This completely goes against the historical norm of "volatility gradually narrowing during the stock market's rising phase" - this linkage usually only occurs in the recovery phase after a crisis low. In this round of market conditions, the Nasdaq 100 index fell only 12% from the previous peak, and the S&P 500 fell less than 10%, which is not a deep bear market rebound.

Wmax Trading Strategy: Tai Chi Defense, Waiting for the Strike Zone

Before the trend clearly breaks, the valuation framework of traditional value investing has temporarily expired. Facing the current extreme market environment, Wmax recommends adopting a Tai Chi defensive counterattack strategy of “not guessing the top, not going against the trend, and not chasing highs”:

• Refuse to go short against the trend: Trends have self-reinforcing inertia, and high valuations may be digested through performance growth or further pushed up by emotions. Going short against high momentum assets is like catching a flying knife with nothing, and the risk-return ratio is extremely poor.
• Resolutely stop chasing higher prices: When the profit-loss ratio seriously deteriorates, "it is better to miss than to make a mistake." Every high-chasing transaction at this time is essentially paying for early profits.
• Waiting for the opportunity: Hold sufficient cash in hand and maintain a “blind sense” of the market. Wait patiently for a correction from high levels triggered by external catalysts such as repeated inflation data, escalating geopolitical conflicts or lower-than-expected performance of technology giants. Only when the VIX panic index surges sharply, or when valuations fall back to near the historical median, is the best time to reallocate long-term funds.

Conclusion

Investment is a marathon, and you don’t have to exhaust your energy in every 100-meter sprint. Wmax always believes that the real investment ability lies not in how fast you can make money in the bull market, but in how much principal you can keep when the bubble bursts. When the tide recedes, we must not only ensure that we do not swim naked, but also hold enough chips to pick up precious pearls left by others on the beach.