Jeffrey Bierman warns that stocks and Bitcoin are driven by fear of missing out rather than fundamentals, signaling a correction risk unless managers diversify into undervalued sectors.
October 4, 2025
Source:
MarketWatch
Analyst Flags Risks in Red-Hot Markets
Jeffrey Bierman, a veteran market technician, has issued a warning to investors, stating that both stocks and Bitcoin are advancing on what he calls "fumes and FOMO"—momentum and speculation rather than solid economic fundamentals (Morningstar | CEOExpress). Bierman believes this could leave the market vulnerable to a sharp correction as soon as October 2025, an opinion that contrasts with the current mood on Wall Street, where indices like the Dow and S&P 500 are at record highs, even amid political disruptions (Yahoo Finance).
Momentum Over Fundamentals
Stocks and crypto are surging not because of fundamental strength but due to speculative behavior, Bierman insists.
Political factors, such as the U.S. government shutdown, have not yet affected the rally, but this calm may be misleading.
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Source:
MarketWatch
Diversification as a Stabilizing Move
Bierman suggests that the way to avoid a selloff is for institutional investors to diversify into undervalued, lower-profile sectors (Buzz FX). He argues that risk is currently concentrated in popular, overbought sectors and that a shift towards 'unloved, cheap sectors' could reduce market fragility.
What Are "Unloved, Cheap Sectors"?
Not directly named by Bierman, these typically mean value stocks, small-cap equities, or sectors that have not led the recent market rally.
Morningstar notes that such moves historically help spread risk and dampen volatility.
Differing Market Views
While Bierman points to technical risks, many analysts still see the underlying fundamentals and resilience in the broader market (Dow Jones). This divide is fueling debate among fund managers over what comes next.
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Source:
Theo Trade
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