Pendulum

Credit stress signals, the valuation trap, and my current portfolio positioning...

Marlin Capital Readers,

Today was another brutal day for US stocks. The S&P 500 fell -1.7% while the Nasdaq dropped -2.4%, officially entering correction territory (down more than -10% from its October highs). Oil surged another +5%, Treasury yields spiked, and the OECD hiked their US inflation forecast from 2.8% to 4.2%. The selling was broad and aggressive.

The major market indices are now breaking down after already establishing themselves below their 200-day SMAs.

S&P 500 👇

Nasdaq 👇

And the Bond Market is flashing some concerning signals right now.

The MOVE Index

I have been talking about signs of credit stress for several weeks now, and the Bond Market is confirming those concerns.

The MOVE Index (think of this as the VIX for the bond market) measures volatility in US Treasury options. When the MOVE Index is spiking, it tells you that the Bond Market is pricing in greater uncertainty and stress. This is not a signal equity investors should simply ignore.

Right now, Bond volatility is pointing significantly lower for equities from here. 👇

Marlin Capital Strategy

None of this has taken us by surprise here at Marlin Capital. I have been talking about the key warning signs since October, and we have been positioned accordingly.

We started 2026 with 34 longs. We are now down to 9.

And here’s what we’re doing next at Marlin Capital. 👇