The market setup is getting more nuanced. It’s no longer just about whether risk assets are bullish or bearish. Rates, the dollar, positioning and valuation are starting to matter more. 💵 1. US Dollar I’m watching for upside risk in the dollar. Technical momentum, sentiment, positioning, macro conditions and Treasury yields are becoming more supportive, while policy shifts and geopolitical risks could add another layer of volatility. 🇺🇸 2. US Treasuries The contrarian bullish case remains compelling: • Cheap valuations • Extremely bearish sentiment • Crowded positioning But for now, it stays on watch as macro headwinds remain and the technical picture becomes increasingly fragile. 🌎 3. EM Fixed Income Still neutral. Higher inflation and rates create downside risk for EM sovereign bonds, wh

📊 This Week’s Market Takeaways The stock market may have gone through a “stealth correction” without a headline-level selloff. Here’s what stood out 👇 1️⃣ The equal-weight $S&P 500(.SPX)$ is down more than 5% from its peak. The weakness underneath the index has been much deeper than the headline $SPY suggests. 2️⃣ Breadth has been beaten down. Participation has weakened, while traders have been raising cash and becoming more defensive. 3️⃣ Momentum is coming back. 🚀 Momentum stocks are starting to regain strength, while profit margins continue pushing higher. 4️⃣ Valuations remain a concern. ⚠️ Several valuation measures are still historically elevated, leaving less room for disappointment. 5️⃣ The reset may be doing some work. A stealth cor

Here’s how I’m currently seeing Macro & Markets: 🌎 Global ex-US Equities Still bullish on global ex-US equities, both outright and relative to the US. Valuations remain attractive, technicals are constructive, and the macro backdrop is supportive. Global equity gains have also started to broaden beyond the US, with Asia Pacific among the stronger regions recently. 🇺🇸 US Small Caps I remain bullish on US small caps. The valuation gap versus large caps and bonds remains attractive, while macro fundamentals are improving. Positioning and sentiment also remain relatively contrarian, which creates an interesting setup if the technical picture continues to improve. ⚖️ Global / Small / Value vs US / Large / Growth This is becoming one of the more interesting relative-value themes. I continue

Despite all that’s gone on this year we have actually seen quite a significant reacceleration in the global economy. Notably this has been particularly pronounced in the real-world cyclical parts of the economy (manufacturing, trade, fixed asset investment). That’s important because it’s those sectors that have the most direct impact on commodity prices. And it’s among the reasons (including geopolitics and supply constraints) we’ve seen such enduring and broad-based strength in commodities this year. It’s also been a key driver of upward pressure on inflation, and along with stronger growth has contributed to the global policy pivot to interest rate hikes that is currently underway (with the Fed likely joining the pivot party soon). This speaks to the highly cyclical nature of commodities

FOMC week is here, and the latest $S&P 500(.SPX)$ ChartStorm is flashing more warning signs than the headline index suggests. The key takeaway is simple: ⚠️ Breadth is deteriorating ⚠️ Correlations are becoming less comfortable ⚠️ Corporate bonds are sending caution signals ⚠️ Volatility is picking up ⚠️ Liquidity could become a headwind ⚠️ Growth has started losing momentum vs. value ⚠️ Semiconductors are stalling That combination matters. $SPX can still hold up while fewer stocks carry more of the index. But when breadth keeps weakening, leadership becomes narrower and the market becomes more vulnerable to a catalyst. And this week has one. 🏦 The Fed meets Sept. 15–16. Markets are now heavily pricing a rate hike after stronge

The Fed may have more work to do. Based on the usual relationship between inflation expectations and the labor market, the fed funds rate would be closer to 5% right now. That’s more than 100 bps above the current 3.75% level. 👀 The bigger issue is what’s happening underneath the surface. 🔥 Inflation expectations have settled into a higher range. 💼 The labor market is heating back up and remains relatively tight. Put those two pieces together and the current policy rate starts looking less restrictive than it appears. The Fed’s recent hesitation may have bought some time, but the data is pushing the other way. Recent inflation data has already increased market expectations for a hike, while stronger employment data has added more pressure. 📊 The chart tells the story clearly. If inflation

The charts are starting to tell a slightly different story. $S&P 500(.SPX)$ is still near the highs, but the ride is getting less smooth. And some of the warning signs are showing up outside equities. Here are my biggest takeaways this week: 1️⃣ The S&P 500 is starting to wobble The trend hasn’t broken, but momentum is becoming less convincing. After such a strong run, even a modest pullback can expose how crowded positioning has become. 2️⃣ September weakness is showing up on schedule Seasonality is working against the bulls. September has historically been one of the weakest months for U.S. equities, so the timing of this slowdown isn’t exactly surprising. But seasonality alone isn't a short thesis. 3️⃣ Credit markets are starting to whi

Every so often you come across a chart like this where there is a big long-term technical tension playing out. Bears will highlight the Lower major Highs (drawing the red line), bulls will highlight the Higher major Lows (drawing the green line). Both of them are right, and that’s the point. The technical tension = simultaneous up & down trends vying for dominance. I’ve seen this type of thing play out many times before across different assets and markets, and the resultant move tends to be violent, substantial, and sets the tone for many years to follow. And I see this setup here as no different. But then you also consider the macro influence of the US dollar, and you realize that this is not just a major issue for asset allocators and traders, but something that could have far reachi

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $Cboe Volatility Index(VIX)$ Learnings and conclusions from this week’s charts: 1. Sentiment is still majority consensus bullish. 2. Stock correlations have dropped to record lows. 3. Volatility (VIX) looks low vs seasonals and single-stock metrics. 4. Semis are still stuck in the mud (peaked, and looking weak). 5. Software is looking stronger (software vs hardware trade reversing?). Overall, the market mood remains bullish and there are some bullish rotation trades underway. But the question is when does this consensus bullishness become complacency? There are a few flags of a potential volatility flare-up on t

Stocks beating Bonds should be no surprise for those paying attention. Stocks are in a raging bull market. Bonds are in brutal a bear market. But you might be surprised by the extent of it (see chart below). The rolling 10-year annualized total return spread (i.e. including interest for bonds, dividends for stocks) of stocks vs bonds just cracked 15% —the highest since 1960 (and eclipsing the 1929 high). $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ Looking at the two series separately (below) we can see bonds making long-cycle lows, and stocks making long-cycle highs in real (CPI-adjusted) total returns. I think it’s important to emphasize the word cycle, because there does appear to be some rhyth

This week’s charts continue to show a decidedly bullish market. 📈 Breadth is improving. The equal-weighted $S&P 500(.SPX)$ is starting to outperform the cap-weighted index, suggesting the rally is broadening beyond the mega-cap names. That’s generally a healthy sign for the market. 💰 Earnings are getting stronger. Earnings revisions are surging, with a solid macro backdrop providing additional support. At the same time, higher prices are boosting investor confidence, sentiment and equity allocations. ⚠️ But the rally isn’t risk-free. Seasonality is becoming less favorable, the Magnificent 7（ $NVIDIA(NVDA)$ $Apple(AAPL)$