Is a Market Correction Coming? 10 Warning Signs You Can’t Ignore🚨 Markets look euphoric… but data says otherwise.
Hello @TradingView users, hope you are doing well
Here are 10 reasons why we think a sharp pullback could be near
(Not financial advice — just signals stacking up.)
1) Record yield-curve inversion: The 10y–2y spread was negative for a record ~783 days before ending in Sept 2024; such inversions have preceded every U.S. recession in recent decades.
2) Q1 2025 GDP dipped, Q2 rebounded: BEA shows real GDP fell in Q1 2025 (revised −0.6%), then rose +3.8% in Q2 2025. One more weak quarter would meet the “technical” definition, but Q2 strength complicates that path.
3) Cuts usually come with stress: Markets are pressuring the Fed to cut; historically, rate-cut cycles often start when growth/inflation risks tilt weaker (not typically in “booming” conditions).
4) LEI turned down again: After a tiny July uptick, the Conference Board’s LEI fell −0.5% in Aug 2025 and is −2.8% over the last 6 months, pointing to softer momentum (the “15+ straight months” stat is no longer current).
5) Valuations are stretched: The Shiller CAPE > 40, the highest since the dot-com era—historically linked to weaker forward returns.
6) Labor market showing cracks at the margin: Unemployment ~4.3% (Aug 2025) and job openings ~7.2M (Aug)—down from the 2022 peak—suggest some cooling, even if not severe. (I removed the unsourced “+35% layoffs” figure.)
7) Buffett’s record cash: Berkshire now holds roughly $381–$382B in cash & T-bills, an all-time high—interpreted by many as “waiting for better prices.” (Replaces the older $347.7B figure.)
8) Government shutdown risk/drag: The U.S. is in a prolonged federal shutdown (30+ days), with credible estimates of a material GDP hit if it persists—an added macro headwind.
9) Parabolic leaders, dot-com déjà vu vibes: Today’s rally is narrow and AI-led, and valuation gauges echo late-1990s extremes—a setup that can amplify drawdown risk on disappointments.
markets.businessinsider.com
10) Clustering of risks: Yield-curve history + LEI weakness + stretched valuations + policy uncertainty = elevated correction risk, even if timing is uncertain.
Please be cautious, more signals are starting to align, suggesting a potential market drop. From Warren Buffett holding significantly more cash, to the ongoing government shutdown, and even the recent sharp rally that mirrors patterns seen right before the dot-com bubble, the puzzle pieces are starting to fit together.
This message isn’t to cause panic, but rather to remind you to trade carefully and stay prepared either by keeping some cash ready to invest if the market drops, or by simply sticking to your existing long-term investment plan if you have any.
Comment below what YOU think, is this a healthy dip incoming or the start of something bigger?
@TradingView Appreciate it if you guys can feature this post so more traders and investors get the warning and stay safe if the drop happens.
Thank you
Alain M(Coach)
WTW Team
NYSE:DOW NASDAQ:NDX SP:SPX
