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Forty years after President Ronald Reagan first conceived the idea, defense industry leaders say the technology is finally advanced enough to build an invisible protective dome of space-based radars, missile interceptors and laser weapons over the United States.

President Donald Trump, infatuated by the Iron Dome missile defense system over Israel, first ordered the Defense Department to begin drawing up plans for a U.S. version, the ‘Golden Dome,’ in January. 

But Israel is roughly the size of New Jersey, so a dome of protection could prove far more daunting for the much larger land mass of the U.S. And the threats to Israel usually come from its neighbors, who use short-range weapons. America’s foes — North Korea, Iran, Russia and China — are half a world away and armed with intercontinental ballistics missiles (ICBMs) and hypersonics, all factors that make the project more challenging for a nation on the size and scale of the U.S.

So questions remain. Will the Golden Dome encompass the entire country, including Hawaii, Alaska and U.S. military bases in locations like Guam? Would it be able to protect against short-range missiles, long-range missiles, unmanned and manned aircraft? 

Answers may come at least in part at the end of the month, when the Department of Defense and the Office of Management and Budget present a funding plan for the project to the White House. But defense industry leaders say the technology exists to make a Golden Dome a reality. 

‘​In our view, it has to kind of be a layered system. Because, you know, shooting a UAV, for example, is very different than shooting a hypersonic vehicle or hypersonic weapon,’ Raytheon CEO Phil Jasper told Fox News Digital. His aerospace company, a major U.S. defense contractor, manufactures the Patriot missile system, Javelin anti-tank missiles and a variety of radar and air defense systems.

The U.S. already employs a layered missile defense system known as the Command, Control, Battle Management, and Communications (C2BMC) System that uses radar to detect incoming missiles and fire off interceptors. 

It has technology like the THAAD (Terminal High Altitude Area Defense) battery to intercept ballistic missiles and the Patriot to intercept cruise missiles, ballistic missiles and aircraft. But the country only has seven active THAAD batteries deployed globally, with an eighth expected to become operational this year. 

Space Force Gen. Michael Guetlein said weeks ago that building a Golden Dome will require a Manhattan Project-level whole-of-government approach from the missile defense agency, Air Force, Army, Navy, Space Force, Coast Guard and more. 

Defense contractors, some of whom have believed a Golden Dome-like project was on the horizon for years, say the protection zone may start around major cities like New York and Washington, D.C., or sensitive military sites before expanding to protect the entire homeland. 

‘What I’m understanding [the goal] really is to protect the entire U.S. It is to put a dome around the homeland,’ said Edward Zoiss, president of space and airborne systems for L3Harris Technologies.

Jasper predicted some of these defensive measures could be installed rapidly, as soon as 2026. 

‘What the administration has laid out is that building block approach that you can start to protect certain areas, at times, certain regions, and build that out as you continue to produce these systems. And they can continue to come off of production lines,’ he said.  

BlueHalo CEO Jonathan Moneymaker said the dome would be ‘less of a technology problem’ and more of an organizational structure challenge. 

‘The full potential of all of those capabilities working in conjunction with each other, at that scale, there’s definitely some new elements there,’ Moneymaker said.

John Clark, Lockheed’s vice president of technology and strategic innovation, said the plan will require the Pentagon to ‘think about what it has on the shelf.’ 

‘There are systems that sit today in the Air National Guard or in our current local defense infrastructure domestically. Those could actually be deployed inside of the U.S,’ he said. 

Clark noted that deploying defense infrastructure at home would ‘draw down our current inventory for conflict in the greater world.’ But he suggested that anything pulled out of an Army base today could be backfilled at a later date for global use.

Zoiss, whose company, L3Harris Technologies, has already built satellites for the missile defense agency that could be used for space-based radar systems for a Golden Dome, said the biggest challenge is missiles that no longer follow predictable paths. 

‘If you go back to your high school physics class, if you understand the angle and trajectory of a bullet, you understand exactly where it’s going to land because it follows a parabola,’ he said. 

‘ICBMs followed parabola trajectories for decades. But a new class of highly maneuverable cruise weapons and hypersonic weapons now don’t,’ he explained. ‘Their endpoint is uncertain. And our defensive systems in the U.S. now have to change to be more robust in order to track that weapon throughout its entire trajectory.’ 

Space-based radar will be the critical element of threats to the homeland in the future, according to Zoiss. 

‘Our challenge is really long-range weapons. You know, it’s weapons progressing large distances that are maneuvering around our current land-based and sea-based radar systems. So, if the weapons maneuver around those systems, that means our current architecture can’t provide fire control ordnance. And, therefore, it has to be moved to space.’ 

The Golden Dome could draw on missile defense missions already in the works, like the National Capital Region Integrated Air Defense System, which is designed to protect Washington, D.C., from incoming threats and employs systems like the Norwegian National Advanced Surface-to-Air Missile System (NASAMS).

And it could look to other systems already in the works on a smaller scale. The Army is working on a new Iron Dome-like air defense system in Guam known as the Indirect Fire Protection Capability (IFPC) Increment 2 system. And it is developing high-powered microwave systems that could knock entire drone swarms out of the sky. 

The Marine Corps is planning to field three mobile air defense systems this year, including a modified Iron Dome launcher. 

Other needs could be over-the-horizon radar, including filling blindspots in the Arctic region for low-flying missiles that hug the earth’s curvature to avoid detection. 

Guetlein said the nation would have to ‘break down the barriers’ between Title 10 and Title 50 of the United States Code, the federal laws that govern the nation’s defense and clandestine operations.

‘Without a doubt, our biggest challenge is going to be organizational behavior and culture to bring all the pieces together,’ Guetlein said.

Much of the funding is expected to be laid out in Trump’s fiscal year 2026 budget request to Congress, which the White House is working on. Even with initial funding, the project could take years to complete, and it won’t be cheap. 

Steven Morani, acting undersecretary of defense for acquisition and sustainment, said Wednesday he was working with the private sector to address the ‘formidable’ challenges of the project. 

‘Consistent with protecting the homeland and per President Trump’s executive order, we’re working with the industrial base and supply chain challenges associated with standing up the Golden Dome,’ he said. 

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Democrats have pushed back after Elon Musk claimed that social security operates like a ‘Ponzi scheme’ as he continues to argue for cuts to the federal bureaucracy, but one expert tells Fox News Digital that Musk is on track with his criticism of the agency.

‘Musk’s statement about Social Security being the world’s biggest Ponzi scheme does have validity,’ James Agresti, president of the nonprofit research institute Just Facts, told Fox News Digital in response to pushback from Elon Musk’s claim, which included a ‘false’ rating from Politifact. 

‘A Ponzi scheme operates by taking money from new investors to pay current investors. That’s the definition given by the SEC, and contrary to popular belief, that’s exactly how Social Security operates.’

Agresti explained to Fox News Digital that Social Security, believed to be a target of Musk’s efforts at DOGE, ‘doesn’t take our money and save it for us, as many people believe, and then give it to us when we’re older’ like many Americans might believe. 

‘What it does is, it transfers money when we are young and working and paying into Social Security taxes,’ Agresti said. ‘That money, the vast bulk of it, goes immediately out the door to people who are currently receiving benefits. Now there is a trust fund, but in 90 years of operation, that trust fund currently has enough money to fund two years of program operations.’

The trust fund only being able to last for two years is not a result of the fund being ‘looted,’ Agresti explained, but rather it was put in place to ‘put surpluses in it’ from money that Social Security collects in taxes that it doesn’t pay out immediately and pays interest on. 

‘The interest that’s been paid on that has been higher than the rate of inflation,’ Agresti said. ‘So, the problem isn’t that the trust fund has been looted. The problem is that Social Security operates like a Ponzi scheme.’

One of the top Social Security criticisms from Republicans, including President Trump, has been a concern that individuals who are dead or listed with an age well over 100 years old are on the rolls and receiving benefits.

Agresti told Fox News Digital that there are legitimate reasons to be concerned about that issue.

‘What’s unclear to me at this moment is whether or not the people who are on the books are actually receiving checks,’ Agresti said. 

‘Back during the Obama administration, there was a stimulus, and the Obama administration sent out stimulus checks via Social Security numbers to 80,000 people who were dead, and about 70,000 of them, the Social Security Administration knew they were dead. So I don’t know if they’ve remedied that situation since then, but clearly the system is not keeping up with the pace of current data, and that provides an opportunity for fraud.’

Democrats have also made the case that Musk is attempting to strip away benefits that senior citizens have rightfully earned. Agresti told Fox News Digital that is not what is happening.

‘There’s been a lot of misinformation about that as of late,’ Agresti said. ‘You know, when DOGE came in and suggested that the Social Security Administration cut, I think it was about 10,000 workers, Democrats erupted that this is going to weaken Social Security. But the fact of the matter is that Social Security pays those workers who are for administrative overhead from the Social Security trust fund. So, by cutting out the money that they’re paying them, you actually strengthen the program financially.’

Agresti told Fox News Digital that the current administrative overhead for Social Security is $6.7 billion per year, which is enough to pay more than 300,000 retirees the average old age benefit.

Questions have emerged from critics in recent years as to whether Social Security, in its current form, is even capable of remaining solvent to pay benefits to Americans who have paid in over the past few decades.

Agresti told Fox News Digital that the program will ‘become insolvent’ as soon as 2035 if changes are not made. 

‘To give you a feel of how disconnected Social Security is from a fully funded pension plan, if to keep the program solvent and put it on the same firm financial footing as a real pension plan, it would require an extra $272,000 in additional payroll taxes from every person paying payroll taxes right now,’ Agresti told Fox News Digital. 

‘I’ll give you another way in which more numbers prove this point. If you retired in 1980, it took about three years of receiving Social Security benefits to get back the value of your payroll taxes plus interest. If you retired in 2000, it took 17 years. If you retired in 2020. it will take 22 years, assuming the program has enough money to pay those benefits, which it won’t without another increase in taxes on another generation of Americans.’

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They are like a classic comedy team crafted in a1950s Hollywood studio. There’s the old and grump straight man, Sen. Bernie Sanders set in his Marxist ways, and there’s the young, bubbly comedian Rep. Alexandria Ocasio-Cortez, always smiling or dancing or making cute TikTok videos.

Last week, Sanders & AOC launched a national tour to perform for tens of thousands. The Democrats’ dynamic duo even played Vegas, where they insisted attendees don COVID masks (no, seriously). The question is, why are they on the road?

The 2026 midterm elections are more than 19 months away, so why would two Democrats whose seats are safe as houses spend millions of dollars and untold man hours on this traveling circus today?

The answer is that Sanders & AOC are confronting an emergency, just not the one they say they are. They want you to think the emergency is President Donald Trump’s second term, but the real emergency is that America is firmly rejecting their brand of far-left progressivism.

Make no mistake, old man Sanders and his spunky sidekick aren’t really fighting against Trump, they are fighting to maintain ideological control of a Democratic Party that right now might be the least popular major party in American history.

In the aftermath of Kamala Harris’ embarrassing defeat in November, all fingers were pointed at wokeness to explain the Democrats’ woes. From men in women’s sports and open borders, to Diversity, Equity, and Inclusion and ending private health insurance, the far left has been rejected at every turn.

So here come Sanders & AOC in their hilariously named ‘Fighting Oligarchy’ tour, this from two people who never saw a big bundled donation from George Soros that they wouldn’t greedily accept.

And yes, they perform some tired old material about Trump supposedly tearing down Democratic norms, or Elon Musk swimming in a pool of stolen social security money like Scrooge McDuck. But the real story is in the new material.

Take this from AOC, for example, ‘This isn’t just about Republicans,’ she opined in Arizona. ‘We need a Democratic Party that fights harder for us. That means each and every one of us choosing and voting for Democrats and elected officials who know how to stand for the working class. I want you to look at every level of office around and support Democrats who fight, because those are the ones who can actually win against Republicans.’

Not lately, congresswoman.

On Sunday, the Democratic Socialists of America, who launched Ocasio-Cortez’s career, were protesting in New York City to demand that Senate Minority Leader Chuck Schumer step down for refusing to pointlessly shut down the government this month.

These are desperate last gasps. Since 2008, when the party of Bill Clinton, once the moderate Democratic savior, became the party of Barack Obama, the Democrats have lurched so far left that their most sacred shibboleths of wokeism appear to most Americans as beyond parody.

Sanders & AOC are well aware that as they continue to try to sell gender bending, the green new deal, and endless illegal immigration, there are lean and hungry Democrats like Rep. Ritchie Torres D-NY, Sen. John Fetterman D-PA, and New York City mayoral candidate Andrew Cuomo who are ready to remake the party in their more centrist image.

Even fellow comedian and TV Host Bill Maher is sticking it to Sanders & AOC by accepting a friendly invitation to meet with Trump. His message is clear; screaming, ‘THIS ISN’T NORMAL!!!’ over and over again isn’t working and never will.

This Burns & Allen act that Sanders & AOC have going on is meant to spur the Democratic faithful into revolt against semi-normal party leaders, the kind who won’t encourage the destruction of Teslas or stand around outside empty DC office buildings singing 1960s resistance songs off-key.

Those more centrist Democrats have the upper hand now, and they know it. This is why instead of barnstorming the country with political celebrities, they are biding their time, building their war chests, and plotting a new course for their party.

In the end, don’t be surprised if Sanders & AOC’s Fighting Oligarchy Tour turns out to be the final goodbye tour of socialism in the Democratic Party and in our national politics. 

The American people gave the party of Obama a good fair chance and, for their trouble, wound up in a deeply divided nation overwhelmed by illegal immigration, a crushing cost of living and frankly, a stark and troubling lack of patriotism.

Put another way, the party of Obama has failed, and no matter how many times Sanders & AOC yuk it up for a crowd of liberal college-educated women, that fact and its electoral consequences are not going to change.

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Senate Minority Leader Chuck Schumer, D-N.Y., has refused to step down from his leadership position, as Democratic infighting worsens while the party struggles to agree on messaging to challenge President Donald Trump. 

‘Look, I’m not stepping down,’ Schumer said in a pre-recorded interview that aired on NBC’s ‘Meet the Press’ on Sunday. ‘I knew that when I cast my vote against the government shutdown that there would be a lot of controversy.’ 

Schumer defended why he chose to vote in support of the Republican-proposed continuing resolution to avert a government shutdown despite the bill’s broad opposition by the Democratic Party. 

‘The CR was certainly bad, you know the continuing resolution, but a shutdown would be 15 or 20 times worse. Under a shutdown, the executive branch has sole power to determine what is ‘essential.’ And they can determine without any court supervision. The courts have ruled it’s solely up to the executive what to shut down,’ Schumer said. 

Schumer alleged, without evidence, that Trump, Department of Government Efficiency chair Elon Musk and Office of Management and Budget Director Russell Vought would slash funding for SNAP, or food stamps and mass transit, as well as cut Medicaid ‘by 20, 30, 50, 80%’ He suggested the administration could decide during a government shutdown, ‘We’ll go after Social Security. We’ll go after the veterans.’ 

‘They would eviscerate the federal government,’ Schumer said. ‘Their goal is just eviscerate the federal government so they can get more taxes in their tax cuts to their billionaire class over there. So it would be devastating.’

‘There’s no off ramp,’ he added. ‘Who determines how long the shutdown would last? Only those evil people at the top of the executive branch in the Trump administration.’ 

Schumer told NBC that a Republican senator close to the DOGE team told a Democratic colleague of his that the administration would keep the shutdown in place for ‘six months, nine months, a year til everyone was furloughed and gone and quit.’ 

‘And there would be no way to stop it,’ Schumer said. ‘So I thought that would be so devastating to the republic and anger so many people.’ 

Schumer, who played a critical role in urging Joe Biden to exit the 2024 race, denied that he was acting similarly in resisting calls from his party to resign as leader. Democrats have increasingly criticized Schumer for breaking with House Minority Leader Hakeem Jeffries, D-N.Y., in supporting the continuing resolution, and Schumer has dismissed reports of a potential primary challenge by progressive ‘Squad’ member Rep. Alexandria Ocasio-Cortez, D-N.Y., for his Senate seat. 

‘It was a vote of principle. Sometimes, when you’re a leader, you have to do things to avoid a real danger that might come down the curve, and I did it out of pure conviction as to what a leader should do and what the right thing for America and my party was,’ Schumer said, admitting that there’s ‘disagreement’ in the Democratic caucus on the spending bill, but ‘We’ve all agree to respect each other because each side saw why the other side felt so strongly about it.’ 

‘And our caucus is united in fighting Donald Trump every step of the way,’ Schumer claimed. ‘Our goal, our plan, which we’re united on, is to make Donald Trump the quickest lame duck in modern history by showing how bad his policies are.’ 

‘He represents the oligarchs, as I’ve said, he’s hurting average people in every way,’ Schumer added, saying Democrats are using oversight hearings, the courts and organizing across districts to challenge Trump’s agenda. 

‘I believe that by 2026, the Republicans in the House and Senate will feel like they’re rats on a sinking ship because we have so gone after Trump and all the horrible things he’s doing,’ Schumer said. 

Rep. Nancy Pelosi, D-Calif, the former House Speaker, has claimed Democrats did not gain anything in Schumer conceding to Republicans’ over the CR. 

‘What we got, at the end of the day,’ Schumer responded, ‘is avoiding the horror of a shutdown.’ 

He added that Democrats had ‘no leverage point,’ because Republicans in control of both houses could force a vote on the CR. ‘When you’re on that political mountain, the higher up you climb, the more fiercely the winds blow,’ Schumer said. ‘The only way you stop being blown off the mountain is your internal gyroscope… I had to do the right thing for our country and for our party.’ 

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Sen. Bernie Sanders, I-Vt., got up during a pre-taped ABC ‘This Week’ interview that aired Sunday, and accused Jonathan Karl of asking a ‘nonsense’ question about whether Rep. Alexandria Ocasio-Cortez, D-N.Y., should run for Senate.

Right after calling Ocasio-Cortez ‘extraordinary,’ Sanders would not answer a question about whether he would like to see her in the Senate. Speculation has ramped up about AOC challenging Senate Minority Leader Chuck Schumer in a primary after Schumer supported a government funding bill to avoid a partial shutdown.

‘Right now, we have, as I said, just a whole lot of people in the Congress. OK, Jonathan. Thanks,’ Sanders said as he got up from his seat.

Karl told the senator that he had one more question for him. 

‘Well, I ask you – you know, you want to do nonsense, do nonsense. No, I don’t want to talk about inside the Beltway stuff. I got 32,000 people,’ Sanders said, referencing the crowd that gathered Friday in Denver for an event with AOC.

Karl convinced Sanders to come back and sit down.

‘Well, fine. But I don’t want to talk about this. What was the last question?’ Sanders asked.

Karl then asked about Sanders’ future in politics.

‘Right now, I am very proud that the people of the state of Vermont sent me back to the Senate with 63% of the vote,’ Sander said. ‘Right now I’m Vermont’s senator. That’s what I do, and I’m very happy to do it. I am 83 years of age, so. And I’m tired.’

Rep. Ro Khanna, D-Calif., spoke on CNN’s ‘State of the Union’ whether he would encourage Ocasio-Cortez to challenge Schumer.

‘She’s perfectly capable of making the decision,’ he said. ‘She’s got so many options. She’s got an incredible future. You know, it’s really her decision. But, you know, all I can say is there’s real anger. And there would be a lot of support for her if she decided to do it.’

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As top U.S. officials prepare for a meeting with a Russian delegation in Saudia Arabia Sunday, questions have mounted over how the Trump administration will push Moscow to extend a preliminary ceasefire. 

Russian President Vladimir Putin this week agreed to temporarily halt strikes on Ukraine’s energy infrastructure, which includes Europe’s largest nuclear power plant, the Zaporizhzhia Nuclear Power Station. 

Secretary of State Marco Rubio and National Security Advisor Mike Waltz, who will both travel to Jeddah for the negotiations, said the next step will be to secure a ceasefire over the Black Sea.

Moscow had previously agreed to a similar deal brokered by Turkey and the United Nations in 2022, known as the Black Sea Grain Initiative, which attempted to secure Ukrainian exports of agricultural products to control global prices, but Putin pulled out of the agreement in 2023. 

Security experts remain unconvinced that Putin can be trusted this time around.

But there is another issue that apparently will be on the negotiating table in the Middle East — Ukraine’s nuclear power. 

As the president’s focus on a mineral deal with Ukraine appears to have diminished, he has turned his interest to a new business venture, U.S. ‘ownership’ of Kyiv’s ‘electrical supply and nuclear power plants.’

‘American ownership of those plants would be the best protection for that infrastructure and support for Ukrainian energy infrastructure,’ a joint statement released by Rubio and Waltz said after Trump’s phone call Wednesday with Ukrainian President Volodymyr Zelenskyy.

When asked by Fox News Digital how Putin, who has made his interest in the Zaporizhzhia nuclear power plant clear, will respond to Trump’s new ambitions, Rebekah Koffler, a former DIA intelligence officer and author of ‘Putin’s Playbook,’ said she does not think it will go over well. 

‘Putin almost certainly is not in favor of this idea and will attempt to sabotage such a deal,’ said Koffler, who briefed NATO officials of Putin’s ambitions in Ukraine years before the 2022 invasion. ‘Moreover, Zelenskyy is unlikely to sign off on such a deal also.

‘Zelenskyy would likely agree to cede control of the Zaporizhzhia nuclear power plant to the U.S., which is currently under Russian control. The Russians will not voluntarily give up control of Zaporizhzhia. If someone tries to take it over by force, they will fight to the bitter end.’

It is unclear when Trump’s interest in acquiring Ukraine’s energy infrastructure began, though it appears to tie into his previous assertions that Ukraine will be better protected if it has American workers and businesses operating within its borders. 

The basis of this argument has been debated because there were, and remain, American companies operating in Ukraine during Russia’s invasion. The debate contributed to an Oval Office blowup between Trump and Zelenskyy last month. 

Koffler said Putin could view a U.S. takeover of Kyiv’s four nuclear power plants as a ‘backdoor way’ for the U.S. to extend some security guarantees for Ukraine and a ‘clever way of controlling Ukraine’s nuclear capability, which the Russians believe can be militarized.’

‘It would be viewed as a threat to Russia,’ Koffler said.

When asked how U.S. ownership of Ukraine’s energy infrastructure could affect negotiations, former CIA Moscow station chief Dan Hoffman told Fox News Digital he is not convinced it will have much of an effect on actually securing peace. 

‘Show me the deal. We don’t have a deal yet. We have a ceasefire that’s been broken on energy infrastructure,’ Hoffman pointed out. He noted that even after Putin agreed to stop attacking Ukraine’s infrastructure on Tuesday, the following morning a drone strike hit a railway power system in the Dnipropetrovsk region, which led to civilian power outages. 

‘It’s just another discussion point. There are so many other issues that are of far greater importance. What Putin would probably do for his negotiating strategy is to say, ‘Oh, yeah, I’ll let you do that United States of America, but I want this in return’. It’s always going to be that way,’ Hoffman added, reflecting on his own negotiations with Russian counterparts during his time with the CIA.

‘He wants Ukraine. He wants to topple the government. That’s his objective,’ Hoffman added. ‘Whatever deals he agrees to in the short term, what he really wants to do is destroy Ukraine’s ability to deter Russia in the future and to give Russia maximum advantage. 

‘Right now, he can gain through negotiation what he can’t gain on the battlefield.’ 

While a number of issues will be discussed, the former CIA Moscow station chief said the real key in accomplishing any kind of ceasefire will need to be an authentic signal from Putin that he actually wants the war to end.

‘The big question that John Ratcliffe has to answer is explain to me why Putin wants a ceasefire. I would argue he doesn’t,’ Hoffman said in reference to the director of the CIA. ‘There is zero indication that he wants one.

‘If he wanted to stop the war and stop the killing of his own people and stop spilling so much blood and treasure, he would have stopped it,’ Hoffman argued.

Ultimately, Hoffman said, when looking at how most major wars have concluded, history suggests the war in Ukraine can only truly end on the battlefield.

‘One side loses, one side wins, or both sides don’t have the means to fight anymore,’ Hoffman said. ‘That’s how the wars end.’

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After reaching an all-time around $540 in mid-February, the Nasdaq 100 ETF (QQQ) dropped almost 14% to make a new swing low around $467. With the S&P 500 and Nasdaq bouncing nicely this week, investors are struggling to differentiate between a bearish dead-cat bounce and a bullish full recovery.

There was no question that valuations had become incredibly rich going into the end of 2024, so some sort of corrective move was widely anticipated in Q1 2025. But was the February to March drawdown enough to appease the valuation trolls and empower investors to buy weakness to drive prices to further all-time highs? Today, we’ll lay out four potential outcomes for the Nasdaq 100 ETF (QQQ).

As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario. The goal of this example of “probabilistic analysis” is to expand our thinking of what’s possible, to break down our preconceived market biases, and to open our minds to alternative points of view.

Before we do so, though, I’d love to revisit the last time we conducted this exercise on the Nasdaq 100 back in December 2024.

Going into early January, it appeared that Scenario 4, the Super Bearish scenario, was matching very closely with market action. But a very choppy month of January kept prices fairly stable, and by the end of January the Nasdaq 100 was very close to the end of our Scenario 3.

Back to the current market environment, we’re thinking a Very Bullish Scenario would mean the QQQ continues the current uptrend, which eventually becomes a full recovery to retest the February 2025 high. On the other hand, if this week is really more of a dead cat bounce, then the Super Bearish Scenario could take us all the way down to retest the August 2024 lows.

And remember, the point of this exercise is threefold:

  1. Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.
  2. Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop me a comment and let me know your vote!
  3. Think about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most optimistic scenario, involving the QQQ continuing this week’s rally to retest the recent all-time high.

Scenario 1: The Very Bullish Scenario

I’ve heard plenty of calls that last week’s low was actually “the” low and the bottom is now in. But for the Nasdaq 100 to get all the way back up to $540, we would need to see a dramatic recovery in the Mag 7 names. Without a rally from the mega-cap growth trade, I don’t think it’s even possible for this sort of bull phase to play out.  Given the continued weakness in charts like META, I’d say this is a low probability.

Dave’s Vote: 5%

Scenario 2: The Mildly Bullish Scenario

What if we do see a recovery in most sectors and themes outside the Mag 7 stocks? Scenario 2 would mean the QQQ can only get up to around $200, because without the biggest growth names participating the uptrend has limited momentum. Breadth conditions would definitely improve in this scenario, as stocks thrive on a decent Q1 earnings season.

Dave’s vote: 20%

Scenario 3: The Mildly Bearish Scenario

The two bearish scenarios would mean that the recent upswing starts to turn lower as renewed fears of inflation, geopolitical risk, and a weak earnings season all weigh on risk assets. A mildly bearish scenario means perhaps that we see some signs of optimism as investors begin to feel more familiar with the flurry of policy decisions from Washington. And even though we haven’t gained much ground by the end of April, it definitely feels as if the bear phase is limited.

Dave’s vote: 30%

Scenario 4: The Super Bearish Scenario

What if the flurry of policy decisions we’ve seen is just an appetizer, and the main course arrives in April? Given the global instability and economic concerns, it’s not hard to envision a scenario where the February to March drop was the first in a multi-wave decline that takes the QQQ back down to the August 2024 lows. This scenario seems like the most likely outcome based on the breadth and momentum deteriorations we’ve been tracking for months on our daily market recap show.

Dave’s vote: 45%

What probabilities would you assign to each of these four scenarios?  Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

The Zweig Breadth Thrust is best known for its bullish reversal signals, which capture a material increase in upside participation. There is, however, more to the indicator because traders can also use the “setup” period to identify oversold conditions. This report will explain the original Zweig Breadth Thrust and show how these signals work.

Note that our breadth models turned bearish in mid March and the major index ETFs triggered long-term downtrend signals. I am now watching for something that would prove this stance otherwise, such as a Zweig Breadth Thrust. A set up is in the making using S&P 500 data, but this has yet to translate into a signal. We will follow this setup closely in the coming days. Click here for a trial and full access to our reports and videos.

A Sharp Increase in Advancing Stocks 

The Zweig Breadth Thrust (ZBT) indicator uses NYSE advance-decline data to identify major shifts in the percentage of advancing stocks (breadth). The first step is to calculate the percentage of advancing stocks (advances divided by advances plus declines). Second, apply a 10-day EMA. Thus, the indicator is the 10-day EMA of Advances/(Advances + Declines). This formula comes from Greg Morris’ book, the Encyclopedia of Breadth Indicators.

A value of .40 means the 10-day EMA is just 40%, which shows an extremely low percentage of advancing stocks. A value of .615 means the 10-day EMA is 61.5%, which shows an exceptionally large percentage of advancing stocks. For reference, the chart below shows NYSE Advances and Declines in the middle window and the ZBT indicator in the lower window.

From Setup to Signal

The Zweig Breadth Thrust triggers when the indicator moves from an extremely low level to an exceptionally high level in a short period. Such moves show a major turnaround in participation (advancing stocks). A setup occurs when the indicator dips below .40 (40%), and the Zweig Breadth Thrust signals when the indicator surges above .615 (61.5%) within 10 days.

The chart above shows the ZBT indicator (!BINYBT) in the top window, the digital signal in the middle window (!BINYBTD) and the NY Composite in the lower window. The blue shadings show the indicator surging from below .40 to above .615 within a 10 day window (April and November 2023). The pink shadings show two signals that missed the 10 day cutoff.

This indicator can also identify short-term oversold conditions with a move below .40 (40%). The gray vertical lines show instances when this indicator became oversold (March, August, September and October 2023, April and December 2024). Short-term oversold conditions reflect an extreme pullback that can lead to a bounce.

Solid Rationale, but Something Missing

There is a solid rationale behind the Zweig Breadth Thrust, but something is missing. Those “somethings” are Nasdaq stocks. I suspect Zweig used NYSE breadth because he developed it when the big board (NYSE) dominated trading (80s). The Nasdaq is now a major exchange so a modern breadth indicator should include Nasdaq stocks. I would suggest using S&P 500 or S&P 1500 stocks. Nasdaq stocks account for around 30% of the S&P 500, which is the most important benchmark and where institutions are active. Nasdaq stocks account for around 33% of the S&P 1500, a broad index that covers large-caps, mid-caps and small-caps.

The NYSE ZBT Indicator did not move below .40 in mid March, but versions using the S&P 1500 and S&P 1500 did on March 13th. This means two things. First, the S&P 500 and S&P 1500 became oversold and ripe for a bounce. Second, a possible Zweig Breadth Thrust is setting up with March 27th as the cut off date.

The full version of this report is reversed for subscribers. We show how to set up the ZBT indicator using S&P 500 and S&P 1500 breadth, review past signals and analyze the current situation. This report includes custom SharpCharts with links and a video for deeper understanding. Click here to subscribe and gain immediate access. 

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We wrote about the American Association of Individual Investors (AAII) poll results a few weeks ago. Since then, the bearish activity on the chart has broken a record for the poll. Going back to the poll’s inception in 1987, we have never seen four weeks in a row of bearish readings above 55%. We are now at bearish extremes for this indicator.

Remember that sentiment, which this poll measures, is contrarian. This means that when market participants are extraordinarily bearish, it is a bullish indication. The opposite also applies; extraordinarily bullish readings are bearish for the market.

Clearly, you can see that, even after and during the bear market in 2022, we never saw a cluster of readings this high. This has put the bull/bear ratio at a very low reading. Typically speaking, this would result in an upside reversal.

One thing we would say is that sometimes poll takers are RIGHT! So while we do see extremely bearish readings, we wouldn’t bet the house that this isn’t a bear market. At DecisionPoint.com we have been monitoring our indicators and participation and we are considering that we are in the throes of a bear market rally and that it isn’t likely to stick around. However, charts like this do have us wondering if the correction is all we’ll get.

Conclusion: Sentiment is extremely bearish on AAII and typically this will lead to a sustained rally. However, we have to understand that sometimes the respondents are correct and we’ll see more downside after all.


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Bear Market Rules


Seeing that the earnings slate is light, this week we focus on certain stocks to watch during uncertain times.

If you are jittery and risk-averse, we have two safer (boring) stocks, plus one tech stock that has shown great relative strength compared to its peers. Let’s do a deep dive into all three.

American International Group (AIG)

Insurance stocks have done quite well in the current volatile environment. As inflation fears mount, it’s ironic that an inflationary sector is a good one to buy in the current cycle.

We can go with a basket of insurance stocks by adding the iShares U.S. Insurance ETF (IAK), which is up 7.3% YTD, but, for this article, let’s focus on one of its leaders, AIG.

Fundamentally, results have been solid and bolstered by a strong buyback program. AIG pays a dividend of 1.9%. Analysts, according to Bloomberg data, have the equivalent of 12 buys, 8 holds, and 0 sells with an average price target at current levels of $85.

FIGURE 1. WEEKLY CHART OF AIG. The stock is one of strongest within its sector and is likely to be more stable.

Technically, let’s keep it simple. Looking at multiple time frames, we are seeing breakouts. There are great risk/reward set-ups based on these patterns. It’s one of the strongest within the sector and looks attractive above $80. 

Shares won’t run up like a tech stock, but, in tougher and unpredictable times, look for more stable and slow growth with solid returns; thus, one of the best within the insurance sector.

John Deere (DE)

Another stock with great relative strength within the Industrial sector is DE. It’s up 11.3% year-to-date and outperforming both the Industrials Select Sector SPDR ETF (XLI) (up 0.2% year-to-date) and the S&P 500 (-4%).

Fundamentally, John Deere’s guidance was not solid. Tariff concerns were mentioned, but — and this is a BIG BUT — CEO John May noted in the call that “75% of all products that we sell in the U.S. are assembled here in the U.S.” This fits well with the narrative coming out of Washington.

FIGURE 2. WEEKLY CHART OF DE. After breaking out of a two-year base, it looks like a great setup.

Technically, we see another great set-up. Shares experienced a major break-out of a two-year base on a weekly timeframe. The daily chart, while a tad more choppy, looks solid as well. The risk/reward set-up is also favorable to the bulls.

Again, kinda boring, but pullbacks have been bought. An upside target of $540 over the next year is very plausible given the base it broke out of on the weekly. Use a near-term stop on a pullback just under the $440 level, depending on your risk tolerance.

Broadcom (AVGO)

Broadcom (AVGO) is anything but boring. It’s the third biggest weight in the VanEck Vectors Semiconductor ETF (SMH), fourth in the Technology Select Sector SPDR ETF (XLK) and eighth in S&P 500. It’s one of the biggest stocks in a sector that has been struggling. And yet, when you look at it technically, it’s a top name with great relative strength.

Fundamentally, AVGO had a great quarterly result. AI chip revenue was up 220% y-o-y to $12.2 billion. The $69 billion acquisition of VMWare (end of 2023) is starting to pay dividends, as it helped expand its software business now that it has a full year under its belt. Like most semiconductor stocks, it hasn’t recovered since the DeepSeek news.

FIGURE 3. DAILY CHART OF BROADCOM STOCK. AVGO has retraced to its 200-day simple moving average and looks like a good risk/reward setup.

Yet technically, shares have retraced back to the rising 200-day simple moving average (SMA) and held. That level also coincides with the gap from which it broke above. Thus, the former major resistance area now becomes support. This gives investors a good risk/reward set-up, using the recent lows just below $177 as a near-term stop.

We can also see a bullish crossover in the Moving Average Convergence/Divergence (MACD), which signaled a buy signal last week. Between solid support holding, good technical relative strength, and a MACD buy signal, shares could run back to $215. That target would reach its declining 50-day moving average. If we see momentum come back into the sector, this should lead the rally.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.