To The Moon

The charts are starting to tell a slightly different story.

$S&P 500(.SPX)$ is still near the highs, but the ride is getting less smooth. And some of the warning signs are showing up outside equities.

Here are my biggest takeaways this week:

1️⃣ The S&P 500 is starting to wobble

The trend hasn’t broken, but momentum is becoming less convincing. After such a strong run, even a modest pullback can expose how crowded positioning has become.

2️⃣ September weakness is showing up on schedule

Seasonality is working against the bulls. September has historically been one of the weakest months for U.S. equities, so the timing of this slowdown isn’t exactly surprising.

But seasonality alone isn't a short thesis.

3️⃣ Credit markets are starting to whisper

This is more interesting.

The concerns aren't showing up evenly across credit. Lower-quality borrowers, including CCC-rated companies, are coming under more pressure, while parts of the tech credit market are also attracting more attention.

That matters because credit often starts pricing risk before equities do.

4️⃣ AI is becoming a financing story, not just an earnings story

This may be the biggest thing to watch.

The AI buildout is requiring enormous amounts of capital, and more of that spending is now being funded through debt. The five major hyperscalers issued roughly $200B of investment-grade debt in the first half of 2026 alone, while technology has become a much larger share of new corporate bond supply.

As long as AI revenues and cash flows keep growing faster than the financing burden, that's manageable.

But if borrowing costs rise while the expected AI returns take longer to arrive, the same leverage that accelerates the boom can amplify the bust.

5️⃣ Record profit margins are another reason to pay attention

S&P 500 margins are at extremely high levels, with technology doing much of the heavy lifting.

That's bullish while margins keep expanding.

The problem is that when expectations are this high, the market doesn't need a recession to correct. A slowdown in earnings growth, higher yields, weaker margins or a change in Fed expectations can be enough to trigger a repricing.

So I'm not calling for a crash.

The bigger picture is more nuanced:

📉 Valuations are elevated
📉 Positioning is crowded
📉 Sentiment remains strong
⚠️ Credit is flashing a few warnings
⚠️ AI investment is becoming increasingly debt-funded
⚠️ The Fed remains a major catalyst

At the same time, the bullish case hasn't disappeared.

Corporate earnings remain strong, AI investment is still accelerating, and the U.S. economy has not shown the kind of broad deterioration that would normally confirm a major bear market.

That's why the setup is interesting.

The downside risks are becoming easier to see — but the upside scenario is still very much alive.

The key question now isn't simply whether $SPX goes up or down.

It's whether the next move is just a healthy reset...

or the beginning of something much bigger. 👀

$SPDR S&P 500 ETF Trust(SPY)$ $Cboe Volatility Index(VIX)$ $SPDR Bloomberg High Yield Bond ETF(JNK)$ $iShares iBoxx $ High Yield Corporate Bond ETF(HYG)$ $Invesco QQQ(QQQ)$