Todd Gordon says the stock market breakout is real because Treasury yields failed to push higher. Yields didn't go up. That's the thesis. A thing didn't happen so another thing will happen. This passes for technical analysis in 2026.
The August head fake theory rests on the idea that markets usually collapse in August because everyone remembers that one time markets collapsed in August. Except they also collapsed in October. And March. And basically every month if you zoom in hard enough on a chart while having a panic attack about your Robinhood account.
Gordon's case hinges on bond yields staying flat. Flat yields mean stocks go up because when fixed income does nothing money has to go somewhere and apparently that somewhere is Tesla shares trading at 847 times earnings. The logic checks out if you've suffered a recent head injury.
Here's what retail traders heard: breakout means buy calls expiring Friday. Head fake means it's different this time. Likely to continue higher means take out a home equity line of credit and put it all on SPY weeklies. They'll be underwater by Tuesday and blaming Jerome Powell for not cutting rates fast enough to save their $340 position.
The bond market didn't do the thing it sometimes does. Equities interpret this as permission to rip higher. Makes perfect sense. Treasury yields exhibit basic consolidation and suddenly we're pricing in permanent bull market conditions because a technical analyst said the word "door" in a sentence about gains.
August head fakes exist because traders invent patterns in random noise and then get shocked when September arrives with a chainsaw. But sure, this time the breakout is legitimate because the ten-year note took a nap.
Gordon's right about one thing: this isn't a head fake. It's a full-body fake with a fake ID and a fake Rolex bought with a fake trading strategy that stops working the second you risk real money on it.
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