As we approached Labor Day, markets dramatically reflected SPLV’s message, revealing the underlying fragility that only a few had anticipated. The subsequent market route was a rude awakening for those who ignored SPLV’s early signals.

We witnessed a similar scenario four years later as the markets neared a new decade. Once again, risk-off securities like SPLV delivered a clear warning:

Unbeknownst to nearly everyone, the COVID crisis was looming, ready to upend the global economy. SPLV’s warning manifested in what became known as the “COVID Crash,” a harsh reminder of the market’s ability to sense impending crises.

Now, four years later, we find ourselves in a similar position. This summer’s performance chart highlights a significant and unprecedented event: SPLV has recorded 14 consecutive sessions of gains, setting a record for the longest streak of advancing sessions in history for any security we’ve witnessed or studied in our lifetime. This remarkable consistency underscores the strength of risk-off assets in today’s market environment:

The rarity of such outperformance by risk-off assets is striking, and the message is impossible to ignore. While SPLV didn’t exist in the 20th century, preventing direct historical comparisons, we can approximate its significance. Current performance trends suggest that this ongoing outperformance is a rare event—likely a “100-year occurrence.”

This estimation reflects a profound deviation from typical market behavior, indicating that this level of risk aversion hasn’t been seen in generations. The extraordinary upward trend in a defensive asset like SPLV reinforces the idea that we may witness a significant shift in market dynamics.

This unprecedented performance is a powerful signal for traders, indicating that the market’s underlying sentiment is becoming increasingly risk-averse. Those attuned to market signals should recognize the importance of this message.

Many will ask, “What lies behind this record-breaking advance in SPLV? What’s coming that will explain it?”

Here’s the plain truth: Just as in January 2020, when the COVID crash was impending, we can’t be sure what is on the horizon. But, just like then, the markets are sensing powerful shifts in economic direction—and they are warning us.

For traders, the “why” is largely irrelevant. The critical question is, “When?”

The answer is “now.” Wise traders will act while the majority remains unaware of this critical message.

We’ve recognized the signal—and we’ve acted accordingly.

We will review and discuss the overnight futures at 9:15 on Tuesday morning.