They Aren’t What You Think They Are
Dan Russo, CMT
June 8, 2026
We live in a world where narratives have a profound impact on investment decisions. Notice I said decisions, not outcomes. As humans, we love stories. We need them. Most of us are not wired to stare at spreadsheets or lines of code for very long.
Right now, there are two narratives in the process of being debunked. The first is that bonds are a reliable diversifier to equities. The second is that Bitcoin is a stable store of value that deserves a strategic allocation in portfolios.
S&P 500 and NASDAQ 100
That is not a great look for last week’s candles. Yes, both indices remain above rising 60‑week moving averages, but last week was telling. Both the S&P 500 and the NASDAQ 100 traded to record highs before closing near the lows of their respective ranges.
If we put it in football terms, the bulls drove the ball to the two‑yard line, fumbled, and the bears picked it up. Now we’ll see what they can do with it.
Source: Optuma
Breadth & Leadership
While the major indices made new highs last week, the NYSE Advance/Decline Line failed to confirm. In fact, the one‑year stochastic has been making lower highs since April.
To be clear, a reading near 78% is not unhealthy. But we prefer confirmation, not divergence.
More concerning is the fact that the Mag 7 also failed to confirm.
Source: Optuma
Stock‑Bond Correlation
With equities in a potentially vulnerable position, investors may look to diversifiers for protection. If they are still relying on Treasuries, they may be disappointed.
The one‑year correlation between stocks and bonds is now the most positive it has been since turning positive in April. The five‑year correlation is also positive.
If stocks and bonds are moving together, bonds are not a diversifier.
Source: Optuma
Bitcoin
In November 2025, we added Bitcoin to our investment universe via a futures‑based exchange‑traded product. Our timing was poor, as shown by the blue line on the chart. That said, inclusion in the universe does not mean automatic ownership. In fact, we have not held it.
Why? Because our momentum model has been negative for most of the period since it was added.
We do not believe any asset should be bought and held without question. We rely on objective analysis, and Bitcoin has been in a clear downtrend.
Source: Optuma
Semiconductors
Finally, the semis. Since we highlight them when they are strong, it’s only fair to point out weakness as well. The group made a new high midweek before selling off sharply into the close.
The longer‑term trend remains bullish following last year’s golden cross, but as we noted, the group was extended on both 50‑ and 200‑day Z‑score measures. There is room to correct, and that is what we are seeing.
For now, the bulls retain the benefit of the doubt.
Source: Optuma
Final Thoughts
There are two key narratives in the market that are in the process of being debunked. The first is that bonds are a good diversifier to equities. Sometimes they are, but other times they are not. Their correlation is positive and becoming more so. It is important to remember that correlations change over time, and the only true diversifier is cash.
The second narrative is that Bitcoin is a store of value and should be held as a strategic position. As you can imagine, we disagree.
Trends and correlations change over time, so many assets aren’t what you think they are.
