🐂 Bull or Bubble? How to Trade Smart in a Cautious Rally

Everyone wants to know: The Fed just cut rates — does that mean we’re at the start of a brand-new bull run, or are we sitting on the edge of a bubble?

The answer, as always, is more complicated than a simple yes or no. Markets love certainty, but right now we’re swimming in mixed signals. On one hand, history tells us that strong Septembers often carry into a year-end rally. On the other, there are plenty of signs flashing overbought and stretched. The question for investors isn’t just “Are we bullish or bearish?” — it’s how do we position ourselves when it’s probably both?

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The Bullish Case 📈

• Fed rate cuts inject liquidity and ease financial conditions. Historically, this is fuel for equities.

• September strength: When September is green, the probability of a year-end rally rises sharply.

• Big bank sentiment: Goldman just upgraded global equities to “overweight,” a clear signal of optimism from institutional desks.

• Momentum trades: Robinhood, freshly added to the S&P 500, has become the index’s top winner of 2025 — a symbol of the kind of explosive momentum that can extend rallies.

On paper, this looks like the start of something powerful. Add in seasonal tailwinds (the so-called “Santa Rally”) and you can make a strong case that markets have room to run.

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The Case for Caution ⚠️

• Yields remain high: Elevated Treasury yields raise financing costs and put pressure on valuations, especially in AI and growth names.

• Bubble chatter: Investor surveys show bubble worries climbing, though not yet extreme.

• Recent pullback: The September rally finally stumbled last week, with the S&P, Dow, and Nasdaq posting back-to-back declines.

• Technical signals: RSI levels on names like $NVDA, $TSLA, and $AAPL are flirting with overbought zones.

This isn’t a market where you want to blindly chase. The cracks are small for now, but they’re there.

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