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We will hit 8,000 in the S&P 500 around September this year.
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Tradechitown
132 posts
Tradechitown
@Tradechitown
Husband, Father, Economist, Accountant, and all things Michigan State
Chicago Katılım Nisan 2009
932 Takip Edilen115 Takipçiler
@RyanDetrick Volcker came in with very low government debt after of 35 years of paying down our WW2 debt.
He was there:
For most of Regan’s terms
The Plaza Accord
The beginning of stock buybacks
The rise of 401ks
Savings and loan deregulation
Computerized trading
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Using the S&P 500, Jerome Powell saw the 4th best overall return and third best annualized return.
Most might not realized this (it surprised me at least), but the best annualized return was under Volcker.
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@Optiongirl It is the best time for small caps when manufacturing is expanding and the Fed isn’t hiking. I prefer IJR over IWM because of the Russell 2000 rebalancing coming in June. Keep an eye on the ISM PMI data. x.com/tradechitown/s…
Tradechitown@Tradechitown
Manufacturing expanding after periods of contraction is great for Small Caps. The Russell 2000 outperformed the S&P 500 100% of the time and outperformed the Nasdaq 5 out of 6 years this has happened. Russell 2000 Median Return 19% Average Return 26%
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Russell 2000 (IWM) broke the short-term downtrend on Friday. 280.00 is support.
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There’s now an overwhelming general consensus on Wall Street that we are going to see 8,000 on the $SPX in the next 12 months or maybe even way sooner.
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401,000 contracts of managed money sitting net short while the index is less than 1% from its 52-week high.
That's not a market opinion. That's a coiled spring with a mechanical trigger.
CTAs already started covering last week. 30,884 contracts shifted. The unwind is underway before most people even noticed.
Here's what makes this reflexive. Options are pricing 6.4 vol points above what's actually being delivered. Vol sellers harvesting that premium compress realized vol further. Lower vol means a slow grind higher. Slow grind higher means CTA momentum models flip from seller to buyer.
Suppressed vol feeds the grind. The grind triggers the covering. The covering accelerates the breakout. It's a feedback loop.
Thursday's Core PCE is the only circuit breaker. A hot print reprices the rate path and kills the loop. Anything at 0.3% or below is a green light for the mechanical squeeze to finish what it started.
I think we're looking at fresh highs by Friday. The biggest risk this week isn't a selloff. It's being short when the machines flip.
What's your read on PCE? Hot or tame?
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$760 coming? $SPY
Jake Wujastyk@Jake__Wujastyk
$SPY wants $760 by end of May. I don’t make the rules.
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@texasrunnerDFW @CalebFranzen Bitcoin and software stocks (IGV) have shown a higher correlation than QQQ since 2020. This makes sense because Bitcoin faces the same AI/quantum risks as software.
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@CalebFranzen Gold also down today and down 5% on the month, despite sticky inflation data
Bitcoin may be decoupling from QQQ/risk and and trading more like gold, which is what everyone said it was supposed to be (digital gold)
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$IBIT down -1.4% while the Dow fucking Jones $DIA gains +0.8% into fresh all-time highs is just laughably sad at this point.
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@JasonP138 Second waves on inflation mean hot markets. x.com/tradechitown/s…
Tradechitown@Tradechitown
Inflation YoY was 3.8% in March 2000, same as today. Three rate shock cycles: 1974-80 1994-00 2022-26? Three similar cycles followed: ❌Fed Hike Shock / Tough Market 74' 94' 22' ✅Relief Rally ⬆️⬆️⬆️75'-76' 95'-97' 23'-24' ❌External Shock -20%🔻 77' 98' 25' 🟡Small After Shock -10%🔻 79' 99' 26' ✅🟢Surge 80' 00' 26' 1974-1980 concluded w/ 1.5 years of rate hikes 79-80 1994-2000 concluded w/ 1.5 years of rate hikes 99-00 2022-? Ongoing w/ 2 years of RATE CUTS! Hot Market, Hot Inflation continues.
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Manufacturing PMI continues to be strong -> Small caps leading
Tradechitown@Tradechitown
Manufacturing expanding after periods of contraction is great for Small Caps. The Russell 2000 outperformed the S&P 500 100% of the time and outperformed the Nasdaq 5 out of 6 years this has happened. Russell 2000 Median Return 19% Average Return 26%
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@traderhc I appreciate the put selling comment. I’d probably deploy that if we get another spike down. What’s your longer term thoughts on the stock/bond correlation doesn’t? Do you see this as the start of something longer term?
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Everything is up today. Stocks, bonds, gold, crypto. All of it.
That's not a healthy market. That's a market where nobody has a clue what comes next.
Fear and Greed at 19. Extreme fear. $IWM leading at +1.27% tells you this is shorts getting squeezed, not institutions putting money to work.
Zero systematic flows behind this move. No CTAs buying. No pension rebalancing. Buybacks in blackout. It's air.
I think $SPY fades back toward 650 before the week is out.
The real verdict lands next Tuesday and Wednesday. Consumer Confidence, ISM, ADP, Retail Sales. Four reports in 48 hours. That's when we find out if this growth scare has teeth.
Until then, this is a positioning unwind dressed up as a rally. Who's actually adding risk here?
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@DavidCoxRJ Larger rate shock cycles are oddly similar as well x.com/Tradechitown/s…
Tradechitown@Tradechitown
Inflation YoY was 3.8% in March 2000, same as today. Three rate shock cycles: 1974-80 1994-00 2022-26? Three similar cycles followed: ❌Fed Hike Shock / Tough Market 74' 94' 22' ✅Relief Rally ⬆️⬆️⬆️75'-76' 95'-97' 23'-24' ❌External Shock -20%🔻 77' 98' 25' 🟡Small After Shock -10%🔻 79' 99' 26' ✅🟢Surge 80' 00' 26' 1974-1980 concluded w/ 1.5 years of rate hikes 79-80 1994-2000 concluded w/ 1.5 years of rate hikes 99-00 2022-? Ongoing w/ 2 years of RATE CUTS! Hot Market, Hot Inflation continues.
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when they tell you that because rates are rising stocks can't keep going up and will peak, just tell'em they're wrong, show them this chart and move on to the next conversation... $TNX $TYX $SPX 😎🤨😜
[p.s. my price % measures are poorly shown]
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@yieldsearcher Both, we're in a mixture of late 90's and late 70's rate shock cycles. x.com/Tradechitown/s…
Tradechitown@Tradechitown
Inflation YoY was 3.8% in March 2000, same as today. Three rate shock cycles: 1974-80 1994-00 2022-26? Three similar cycles followed: ❌Fed Hike Shock / Tough Market 74' 94' 22' ✅Relief Rally ⬆️⬆️⬆️75'-76' 95'-97' 23'-24' ❌External Shock -20%🔻 77' 98' 25' 🟡Small After Shock -10%🔻 79' 99' 26' ✅🟢Surge 80' 00' 26' 1974-1980 concluded w/ 1.5 years of rate hikes 79-80 1994-2000 concluded w/ 1.5 years of rate hikes 99-00 2022-? Ongoing w/ 2 years of RATE CUTS! Hot Market, Hot Inflation continues.
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Inflation YoY was 3.8% in March 2000, same as today.
Three rate shock cycles:
1974-80
1994-00
2022-26?
Three similar cycles followed:
❌Fed Hike Shock / Tough Market 74' 94' 22'
✅Relief Rally ⬆️⬆️⬆️75'-76' 95'-97' 23'-24'
❌External Shock -20%🔻 77' 98' 25'
🟡Small After Shock -10%🔻 79' 99' 26'
✅🟢Surge 80' 00' 26'
1974-1980 concluded w/ 1.5 years of rate hikes 79-80
1994-2000 concluded w/ 1.5 years of rate hikes 99-00
2022-? Ongoing w/ 2 years of RATE CUTS!
Hot Market, Hot Inflation continues.
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@Nostre_damus People travel further for work when the economy doesn’t have opportunities close to home / remote.
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There is no way unemployment is 4.3% with this much traffic at 1PM
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Are collapsing bond prices a sign of inflation or deflation?
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@Crowded_Mkt_Rpt He was also coming into a credit crisis, rising unemployment, and a recession.
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Dont trade, fade: "when President Richard Nixon nominated Arthur Burns to chair the Federal Reserve in 1970, economists and politicians generally thought highly of him. Widely respected as a pipe-smoking, independent-minded academic and economic forecaster, he was largely seen as a competent expert with a strong anti-inflation background" #fed #warsh
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@TraceyRyniec They’ll grind for a few years and have it very easy after 40. 32 is when you do this and it pays off, and it feels good to be on the other side. $500/month in a 529 is probably too much and if it’s not enough, their income in 18 years should be able to cover the rest.
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Only the upper middle class, or rich, can easily max out their 401ks and then also an HSA. They are oversaving in retirement accounts. No way they need to be saving $50k a year in the 401ks. $500 a month doesn't seem like enough for the kids college though.
Boring_Business@BoringBiz_
Couple earning $500K/yr as a tech engineer and doctor are complaining about living paycheck to paycheck The irony is that their definition of paycheck to paycheck is after maxing out 401K, HSA and IRA accounts
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@TraceyRyniec Interestingly, a booming stock while the dotcom bubble burst.
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Tractor Supply, one of the top retailers of the last 15 years, hit a 5-year low today. Brutal 2026. I thought the Iran War wasn't having any impact on the US economy? $TSCO (no position)
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@dampedspring I don’t have a strong opinion on this, but lately BTC is trading more like high beta software. IGV/BTC correlation 0.78. My working thesis is that the BTCETF changed the marginal buyer of BTC and have been treating blockchain solutions as software.
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If you want BTC to be digital gold things are going your way. If you want BTC to provide lambo's and speculative generational wealth things are going very poorly.
BTC vol is very low and trending low.
Correlation to gold is trending higher.
NDX correlation probably remains a bit high for digital gold fans.
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Tradechitown retweetledi
Historically, manufacturing “operators” lag 12-36 months behind construction jobs.
Manufacturing and manufacturing employment has been in a prolonged contraction with signs of a cycle bottom. Less about politics (as the post you responded to suggests) and more about the inventory and manufacturing economic cycle.
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