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There’s something I’ve been thinking about a lot lately, and it’s got me seriously rethinking how I’m positioning my portfolio for the next few years.
I’m still bullish for the next 12 months. I’m still buying viable dips and maintaining a constructive stance through most of 2027. But as we push toward the end of 2027 and into 2028, I’m growing intensely cautious about what could be brewing beneath the surface.
By 2027, the secular bull market that began after the financial crisis will be roughly 18 years old. Nearly every major decline since 2009 has become another V-shaped buying opportunity, helped by extraordinary fiscal and monetary intervention.
We doubled the national debt in roughly six years while repeatedly backstopping weakness. Step back and look at that trajectory — does it seem normal or permanently sustainable?
Now the market has embraced a new foundation: AI or bust.
The AI Arms Race and Its Hidden Dependency
AI has become a do-or-die arms race. Corporations, institutions and governments are under enormous pressure to invest before competitors gain an unbeatable advantage. That pressure is driving massive capital expenditures and increasingly ambitious growth expectations, but it also means the market needs those investments to produce real returns.
GDP growth, top-10 stock performance and hyperscaler profit margins are becoming deeply dependent on the AI story holding up. Yet we still don’t know whether AI’s economic benefits will spread broadly, or whether the hyperscalers and a small group of infrastructure providers will capture most of the gains.
That concentration matters. Headline indexes can keep climbing while the average stock struggles, creating the appearance of a healthy market even as the foundation narrows. Market breadth has already been terrible beneath the surface.
If only a handful of companies are carrying performance, disappointing capital expenditures, weaker margins or downward earnings revisions could destabilize far more than the technology sector.
This may not be a typical 10% or 15% correction that gets bought within weeks. If the AI investment cycle stalls after years of fiscal support and concentrated speculation, we could face a 20%, 30%, 40% or even 50% drawdown — a true secular bear market requiring serious downside protection.
How I’m Preparing for What Could Come
I’m not calling for an imminent crash. Earnings are still strong, Wall Street remains enthusiastic and the market still has legs. But history shows that intervention can delay a reckoning without eliminating the cycle. The longer valuations, debt and expectations stretch, the more violent normalization can become.
I’m refining my turbulence model and canary watchlist accordingly. If the market falls well below its 200-day moving average with a bearish 50-period crossover, we shouldn’t be in it. The best trade in that environment isn’t catching falling knives — it’s holding cash and maintaining asymmetric hedges.
I’ll be watching capital expenditure trends, market breadth, earnings revisions, the 2026 midterm elections and every technical signal my models track. As late 2027 approaches, I’ll also prioritize liquidity, conservative sizing and protection.
Stay patient, stay disciplined and keep your eyes on the longer-term picture. This bull market won’t last forever.
I’ll see you in the markets.
Chris Pulver
Chris Pulver TradingÂ
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