Are Financial Conditions Finally Turning for Crypto? | Trading The Markets Aug. 06, 2026

**Kris Bullock** (0:06)
Happy Wednesday, everyone, we were live. I hope you didn't catch that conversation before we went live. But if you do want to catch those, just join us in Discord. We hang out here before the show, and you can also take part in the live conversation. This is Trading the Markets here every Wednesday.
This is the show where we do TA. We look at the markets, we look at crypto, chart some price action, and of course, we take all your questions to see what's on your guys' mind. If you have any questions, just drop them in the chat and we will get to whatever we can. Obviously, we weren't here last week, so we have quite a show for you guys today. We're happy to be back. You know what? Let me shut up and let's get right into it. Kris, happy Wednesday.

**Bijan Maleki** (0:50)
Happy Wednesday. Yes, I'm glad to have you back, glad to be back, glad that the show is working this week. I was so bummed last week that we couldn't make it work. But anyway, good stuff. The good news is that things are actually a lot better this week than they were last week anyway. So I'm going to have a lot more fun reporting on good news today than I would have been all doom and gloom last week. So for what it's worth, I guess it worked out. Nice. So I want to start, as you know, I've built this financial conditions dashboard and it's become my go-to. I watch it a lot. I kind of check it every day. And so I want to start by talking about that because it's relevant. Finally, again, for the first time in several weeks now, if not even a couple of months, we're starting to look like we might be getting back into a favorable state of affairs. So let's start by looking at this financial conditions, this metric here. And this, just quickly to recap, this measures real yield, credit spreads, the dollar index and equity volatility. And it is for the first time at the lowest it's been since it flipped red back at the beginning of June. So for the first time in eight weeks, give or take, we're at the lowest point. And 50 is the threshold for coming off of the tight red bars into a more sort of gray neutral state. And right now we're at 51 So we're inching very close to going from red to neutral. And as I've mentioned a number of times, even a neutral state is favorable enough a lot of the times for things to start moving. And so we're close. We're really close. It's hovering back and forth between 51 and 52 right now, which is good. Also another noteworthy thing, looking at the S&P 500 market breadth, it's the highest that it's been in over two, I think, two years going back to November of 2024 So almost two years, not quite. But that's pretty significant too. It broke out of this range that it's been in, and it's the highest. So this is a very healthy market signal to see market breadth be this high. It's telling us that it's not just an AI story that's running, that's doing well market-wise. Also other big things, I think the last show we had, not the last, well not last week obviously, but the previous show to that, I spent a segment talking about some of the things I wanted to see in order for things to start looking good. And two of the big things that I mentioned were for Global M2 to break out of this long sideways consolidation range that it's been stuck in since the middle of April, and for the dollar index to get back down into this long sideways range that it's been in for many months as well. And we can see both of those things have happened.
The dollar, or I'm sorry, the M2 did break out. It set a significantly higher high, and the dollar has dropped back down into the range. So good things are happening. This is what we need to see.
We're moving in the right direction. And then finally, another thing I wanted to see that I mentioned, I want to see the VIX cool back down.
It had been spiking up here in the 20s for several days in a row. It did have a spike today, but it dropped way back down. It was just a quick, quick spike. And it's down on the day. It's hovering down in the 15s. So that's good too. We're seeing volatility get tempered. We're seeing bond yields come down, stabilize. That's going to ultimately impact real yields. So like I said, all of the things are starting to come in place. And so it's not surprising that off the back of that, we're seeing all time highs in the S&P.