A.I. Fear Escalates and Begins to Spread

Friday, December 12, 2025

Tony Rago spent 18 months refining 10+ setups that work across different market cycles — not just the easy ones.

He  just walked me through the entire Matrix Key system, including how to identify which play fits today’s conditions…and let me just say…

This isn’t theory. It’s the framework serious traders use to stop forcing trades and start adapting.

👉 [WATCH THE FULL BREAKDOWN HERE] →

Don here…

The S&P 500 dropped 100 points today while the advance-decline line sat at 50-50. That combination should not be possible.

Tech is selling off hard. Broadcom cratered after hitting all-time highs. Nvidia is stuck in the mud. Microsoft keeps taking hits. Google broke outside its expected move to the downside.

Yet the broader market looks calm on the surface because traders are playing the rotation game. Capital is flooding into financials, Walmart, Boeing, and Tesla to mask the damage in tech.

This is a false sense of security.

I’ve been watching the S&P futures trade in an 80-point range between 6820 and 6900 for nearly two weeks. We’re now sitting right at the lower edge of that volatility box. A crack through 6800 opens the door to significant downside as correlation kicks in across sectors.

Here’s what makes next week particularly dangerous:

  • The bond market is breaking down despite the Fed’s rate cut. The 10-year yield is pushing toward 4.2% and closing the week considerably higher than it started.
  • Back-to-back weeks of lower-edge expected moves in TLT. This signals trend-worthy selling in bonds.
  • Bond vigilantes may be arriving soon.Interest rates rising while markets sell off will slam every sector.

When bond market stress combines with tech sector weakness, the rotation game ends. That 50-50 advance-decline line will collapse. All those financials and defensive names propping up the market will get dragged down with the passive investment flows.

I took a bearish position in XLF today but held off on additional trades. I’m waiting for higher degrees of correlation before fully repositioning.

Triple witching arrives next Friday with trillions in options expiring. Monday and Tuesday are when the real action typically begins.

Click here to watch me break down the exact levels where this rotation game falls apart

To your success, 

Don Kaufman 

Chief Market Strategist, TheoTRADE

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Published by RJ Hamster

I was born on 6 August 1956 in San Francisco, California to Janet and (the late) Richard Hovis. I grew up in Santa Monica, California where I attended elementary, junior high school, and high school (graduating in 1974), in addition to involvement in sports and recreation (Little League +, the Boy’s Club ++). Further, it was in elementary school – St. Augustine’s By-the -Sea Parish School that I found, and made the choice to truly journey with God. I attended Arizona State University from 1974 to 1977 – seeking to become an architect, however, I was not accepted, and, as such, I graduated with a Liberal Arts degree. Upon graduation from Arizona State University, I attended Cal Poly San Luis Obispo and studied City and Regional Planning at the Master’s level. I successfully completed one (1) year in a two (2) year program – I did not complete the Master’s degree in City and Regional Planning – due to personal reasons. I returned to Santa Monica where I started (October 1979) my career as graphic designer with Exxon Company, USA. I spent five years with Exxon Company, USA. While working with Exxon Company, USA I was accepted into architectural school – Sci-Arc in Southern California, however, I did not attend preferring to stay with Exxon.. In 1982 I married Laura Flosi and in April 1983 we had our one and only child – Lauren Alain Hovis – a gift from God. We moved to Phoenix, Arizona in 1984 from Los Angeles, where I went to work as a graphic designer with Kitchell CEM (from 1985 -1987). From 1987 – 1995 I was an independent contractor, and a registered representative in mortgage finance, financial management, graphic design, and drafting. Further, I attended the University of Phoenix and successfully obtained a Master’s in Business Administration (MBA) in 1982. I was also a member of the Scottsdale Jaycees, where I became very involved in community events and projects. In 1994, I accepted a cartography position with the Defense Mapping Agency in Reston, Virginia. As such, I relocated from Phoenix to Reston. In 1998, I was accepted and worked as a Visual Information Officer with the Central Intelligence Agency. In 2002, I worked as a Support Officer until my retirement (due to a need for shoulder surgery) in September 2018. Away from my Federal Government service, I have been involved in various organizations and activities in Northern Virginia. In November of 2011, I married Rebecca Ouellette in Santa Monica, California. I reside in San Tan Valley, AZ with my two hamster - Jess and Timothy, our fish, our lizard - RJ Lizard., and our cats - Pearl and Grey. As to hobbies, I enjoy playing sports, attending sporting events, mentoring individuals from financial management to hamsters, building models, photography, travel, multimedia design, managing partner for RJ Hamster, and jazz – smooth jazz to a samba or a bossa nova. Love and God Bless, Peter – aka RJ Hamster Jo hi

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