Checking In On the 'Melt Up' In Stocks and Risk On . . . . . . . All Dressed Up Nowhere To Go?

Accumulation/Distribution and Treasuries say one thing, equity expert exuberance and exhilaration echo endlessly . . . . . . . . . . .

Author

David Young
August 12, 2025

This Is Not Investment Advice

How Committed Are Longs to Not Selling?

I’m still aboard the ‘Melt Up’ train. Perhaps I was among the first to even view this scenario in this context using that term, and I am not abandoning it. However - there may be a gap here between near term reality and the broader, swooping concept of the ‘Melt Up’.

First, a recap of how I see the ‘Melt Up’:

  • rare scenario where all the wheels seem to be in motion moving in the same general direction while all seem to be rowing the boat in the same general direction as well

  • governments generally speaking, politically/militarily/socially/financially, forced to realize and accept they need to fortify and strengthen themselves and improve themselves . . . . . . a decade plus of pro-growth fiscal spending growth perhaps forthcoming

  • central banks generally speaking in easing mode which may or may not include rate cuts or balance sheet expansion at any given time

  • a literal war and arms race for AI and Bitcoin dominance and the subsequent impact on the infrastructure buildout for this

  • captured perhaps best by looking primarily through Bitcoin, Silver, and Uranium first but absolutely through ownership and possession of assets, preferably hard and useful ones

Let’s look at some charts to compare a couple prior huge runs in the Spooz to now: 

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S&P 500 1998 - 2000 Rally

922 to 1559 = 69% rally

S&P 500 2020 - 2021 Rally 

2210 to 4818 = 118% Rally

S&P 500 2022 to 2025 Rally

3501 to 6449 = 84% Rally

The current run, if it were to encounter trouble now, puts it in between the Y2K Bubble final rally and the rally back from the shutdown lows. Here’s why I chose those scenarios:

  • Y2K and Internet Bubble similar “new paradigm” and “revolutionary” changes and disruption concepts as we have now with AI and Bitcoin . . . . . . . and there were real winners and the internet was a real game changer but some bumps along the way and serious misallocation of capital took place

  • 2020 bounce came from a sudden shock and shutdown to the economy which created in my view this huge snapback and slingshot effect . . . . . . . the Trade War starting earlier in 2025 created a massive shock though not as significant but different in my view

  • In 1998 there was a nosedive, questioning of the tech/internet explosion . . . . . . in 2022 the AI wars launched kind of as the market was coming out of a significant corrective period . . . . . . in 2001 a hangover recession of sorts, in 2026?

So I suppose the run we’ve seen here is not that unusual but also perhaps not a lock to proceed much further without at least a rest or pause. I am aware the run could continue straight up, it is possible. In 2020 however, an extremely crucial difference was that the Fed was BOTH expanding the balance sheet and publicly announced it was buying junk debt ETFs to get the party started. We do not have that now.

Here’s where I think it leaves us and the impacts on Bitcoin and Risk On/Off:

  • Senses are ever more curious if we have a scenario where tons of decisions and “deals getting done” are pushing the ‘Melt Up’ in a ‘Melty Uppy’ direction . . . . . . . . . but in the here and now 99% of the Money Flow has yet to arrive (no pun intended)

  • Are equities simply way ahead of themselves and Treasuries are providing a reality check

  • I am extremely bullish on, for example, the ‘Mining - Metal Ores’ Industry Group, but even there given the logistics/infrastructure/regulatory/materials timelines despite what might be a glorious decade ahead it doesn’t mean earnings will grow 3x/year starting now for ten straight years . . . . . . .

  • the big bill passed which is great for the markets, but how much of that juice is pumping right here and right now . . . . . in 90 or 180 days nearly anything could happen in the financial markets

  • we can still be longer term well on our way with a new Bull Market but face all sorts of changes in the next 90 days . . . . . . . or not much at all could happen

  • Treasuries and lack of upside Volume and Accumulation for equities keep whispering in my ear

  • the table might be getting set for a broad based economic recovery, but are stocks sitting at this beautiful table for dinner a few hours before everyone else and waiting?

Maybe this helps sum it up a bit. Let’s look at uranium futures prices. These are ‘healthy’ for the industry and an enormous factor in terms of the actual revenue and earnings for the Uranium related equites connected to AI. Revenue can only grow so much within certain time periods. Unless prices of the material are moving higher consistently then it comes down to getting more product out there, which takes time. Jumping the gun a bit.

One more thought . . . . . . . . . . . . . . if this new thing from chatGPT isn’t blowing users away with how incredible it is, what does that say about where we are with AI? $500B it’s worth? Or is growth in AI capabilities hitting a bottleneck somewhere. Market Implications - Money Flow and Price/Volume will tell.

Here is the IBD Big Picture for after the 8/11 session: