The longest government shutdown finally ended this week. It ran for 43 days from October 10 to November 12. And funny enough the S&P 500 still went up 2.4 percent during that time. If you only check the main indices you would think nothing happened, but below the surface volatility was intense.

And right after it ended the market kept selling off, which is not that surprising. A bit of downside volatility after a shutdown ends is pretty common. But if you look a few weeks out the market usually finds its footing again and turns back up.

Bitcoin is still the best real-time indicator of how much risk investors want to take.

The S&P is sitting close to all-time highs, but Bitcoin actually topped in October and has been sliding since then. It is now down about 25% from its peak. And the weakness has spilled over into tech stocks as well.

Bitcoin is moving almost in sync with tech right now. The correlation is very high. So if Bitcoin keeps dropping it will likely pull tech lower as well.

Bitcoin is now sitting right on an important level.

It just fell under 94,000, which means it has basically gone nowhere over the past year. It is trading right around the average price people paid in the last 6 to 12 months. This level needs to hold. If it drops much further it could trigger another large wave of sellers.

But sentiment is already very negative. In fact it is the lowest it has been in over a year, which sometimes sets up a rebound. So maybe this is where it finally finds a bottom. This is a do or die moment.

At the same time we have seen a sharp drop in many speculative stocks.

The high fliers in AI, quantum, and nuclear have taken big hits over the past month. To be fair many of them doubled or even tripled since the bottom in April, so a pullback was pretty much guaranteed. But still pullbacks can brutal if you bought near the top. This is why risk management matters so much and why staying in sync with the general market is so important.

A lot of these big swings are tied to large amounts of leverage.

There has been massive buying of options. The problem with that much leverage is that it makes the market very sensitive to even the smallest moves. Every little drop gets amplified and turns into forced liquidation. That selling then creates even more volatility, and that is how we end up with the sharp drops we are seeing now.

The good news is that these corrections are healthy although painful. They wash out the excess leverage and reset the market so it can move higher again later.

So now investors are hiding in the biggest stocks again and treating them like a safe haven. This is classic megacap positioning. Everyone is crowding into the familiar winners because they feel safer than everything else right now.

But this chart is a good reminder that even the biggest stocks in the world are not safe from volatility. If you look back at 2022 you can see how far those names actually dropped. Nothing is immune when the…