To The Moon

Market Cap Weights -Mega Caps are bigger than usual -Large Caps are at a record low -SMID are smaller than usual We've seen huge shifts in cap weights across size cohorts --majorly distorted market, big moves like this rarely last long and are often the sign of a boom/bubble ready for bust. $S&P 500(.SPX)$ $iShares 20+ Year Treasury Bond ETF(TLT)$ $SPDR S&P 500 ETF Trust(SPY)$ Globalization of the US Stockmarket ...if you think about it, more and more offshore investors buying into US listed companies just as US listed companies are making more and more of their money from offshore. 🤔 Bond yields have been caught in a macro stalemate of resurgence risk vs r

Markets continue to price in stronger global growth, but history reminds investors that leadership stocks often endure steep drawdowns while recession risks can quickly shift the balance back toward bonds. Here are three key macro themes shaping the current investment landscape. 1.Biggest Winners’ Greatest Losses The most interesting aspect of this table is how massive the drawdowns (periods where the stock price declined from its peak) are for some of the best stocks… Not only do you have to pick the right stock, but you have to be able to hold-on and navigate through sometimes catastrophic declines in your portfolio through the process. 2.Global Equities are pricing a much higher PMI as global growth reaccelerates. Are boom times ahead? (or does the red line catch-down) 3.Recessions hurt

The bull market remains intact, driven by AI optimism, strong earnings expectations, and rapidly improving sentiment. However, with mega-cap valuations becoming increasingly stretched and investors once again pricing in perfection, the line between sustainable growth and speculative excess is beginning to blur. 1.US Stockmarket Valuations -Mega Caps= Very Expensive -Large Caps = Expensive -SMID Caps = Cheap 👀 🧐 🤔 $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $Dow Jones(.DJI)$ 2.Stocks are an Anticipatory Asset. Investors buy and sell bas

Lower effective tax rates have quietly become one of the biggest drivers of S&P 500 earnings growth, helping U.S. equities maintain a structural advantage over international markets. At the same time, earnings forecasts are surging, investor optimism is accelerating, and margin debt is once again approaching levels historically associated with major market peaks. 1.The effective tax rate of S&P500 $S&P 500(.SPX)$ companies has been a tailwind for earnings growth as it has consistently fallen over the years. It's also a competitive advantage that US stocks have over their global peers as EM + DM ex-US effective tax rates remain materially higher. 2.Long-Term earnings growth estimates have Exploded 💥 🚀 There's likely some truth in here,

Our composite Valuation indicator is at similar levels seen just before the 1987 Stockmarket Crash. Does that mean the market is about to crash? 👀 🤔 Maybe, but back then there were catalysts --you can't look only at valuations, you need the bigger picture. $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2609(ESmain)$ This is a sign of the times. Because we’re in a raging bull market with an almost frantic sense of greed, we saw record trading in leveraged-long US equity ETFs during the latest market dip. We saw this type of thing in late-2021 too, and it looked like smart money for a moment there...

Bubble Case Study 🫧 🧐 Yahoo presents a sort of case study in stock bubbles, and you see this type of pattern over and over again. Lessons for Bulls: trees don't grow to the sky, there is such a thing as a bad price for a good company, things can turn quicker than you expect. Lessons for Bears: it can take a long time to be right, things can run further and faster than you expect, respect the price action.

This week’s chart is one for the bulls. It shows the MSCI ACWI (All Countries World Index) aka Global Equities in the black line, and 50-day moving average breadth in the red (i.e. what percentage of countries are trading above their 50-day moving average). Breadth indicators like this tell you a couple of things. First, they give you an early heads up on global developments as the impact spreads across countries. Second, for a shorter moving average timeframe like 50-days, it operates as an oscillator. In other words, it gives you overbought/oversold signals. In traditional market analysis a true overbought signal is when an oscillator like this goes to an extreme high —and then rolls over. That second part is key. The reason is you can get an overbought market that stays overbought and g

1.SPXEW vs $NASDAQ 100(NDX)$ The equal-weighted S&P500 $S&P 500(.SPX)$ is pushing higher, and the Nasdaq 100 is stuck in consolidation mode (as tech is in a bit of a stalemate; awaiting cue on next steps). Basically, the bullish rotation theme remains in play [i.e. the rest of the market is finally having its day in the sun as tech takes a back seat]. 2.Global Tech vs US Tech Similarly, the chart below shows how rest-of-world tech continues to push higher (new highs last week), while US tech pretty much looks to be in a downtrend at this point. The divergence here and above still has a bullish/constructive hue to it in that you have the rest of the market + global looking good, doing well in absolu

1. Market Cap Weight As noted above, defensives’ market cap weight reached an all-time low last year, since then they have ticked up as tech has ticked down off record highs. Again, this tells us about the state of the market cycle (note where previous extremes were, and how fleeting they ended up being — and how they ultimately resolved). But it also tells us important investment strategy takeaways such as how passive index investors are now heavily exposed to tech and on the contrary, also have historically low exposure to the diversifying and risk-dampening attributes of defensives. So this is a timely prompt to consider both the big picture macro-market outlook, but also the pragmatic implications for portfolio strategy (e.g. is this the right sector mix for equity exposure? should you

$NASDAQ(.IXIC)$ $Invesco QQQ(QQQ)$ $E-mini Nasdaq 100 - main 2603(NQmain)$ $NASDAQ 100(NDX)$ Probably the most Unthinkable chart you can imagine... US tech stocks have peaked and are losing ground vs global tech stocks. Surely the US is not about to lose its Global Tech Leadership status?? But these things do go in cycles, even if you have big conviction on the very real fundamental story, you can't ignore macro-market-financial cycles, and the cycle is looking quite tenuous... The big issue is Tech Stocks have peaked, are on technically shaky ground ---AND this is coming from a starting point of stretched Valuations.