Variant Perception

Navigate markets with a radar, not a crystal ball. After 15 years of R+D with institutional clients, we’ve turned our best models into a radar for investing in US equities. Invest with the Capital Cycle and the Business Cycle, invest with $VPX. Learn more: etfarchitect.com/wp-content/upl…. The registration statement for the VPX ETF has been declared effective by the U.S. Securities and Exchange Commission (“SEC”). However, the Funds have not yet commenced operations. Shares of the Funds are expected to begin trading on or about 03/12/2026, subject to market conditions.

The bullish tactical setup flagged on Apr 1st has resulted in a surprisingly rapid equity recovery. This not only validates the LPPL trading signals, but also suggests there remains a very strong structural bid (Semis, AI) that exceeds typical mean-reversion dynamics.

Today's landscape is dominated by the "Primacy of Sovereignty" and it feel likes wherever you look, you see that it's a G2 (US-China) world and everyone else is just living in it...

One thing seems clear: energy security is set to move decisively to the forefront of the global policy agenda in the aftermath of the Iran war. Beyond diversification away from Gulf oil and gas and a likely revival of nuclear energy, China’s clean-tech sector could also emerge as a major beneficiary of this shift. Given China’s entrenched dominance across global clean-tech supply chains and EV manufacturing, it would not be surprising if the push for energy security ultimately translates into another leg higher in China’s trade surplus.

Global oil expenditure has swung around 2% of GDP in recent decades. Today, semiconductor spending is only just nearing 1%. If chips are the "new oil" powering the global economy, the market still has a lot of room to scale and runway remains long.

Anthropic revenue (annualized): - January 2025: $1B - May: $3B - June: $4B - August: $5B - October: $7B - December: $8B to $10B -February 2026: $14B -March 2026: $19B -April 2026: $30B (WTF???)

Finally starting to see some LPPL crash exhaustions in US equities, for example in consumer discretionary and growth equities

Beijing is urging peace talks in the Middle East. Foreign Minister Wang Yi held a phone call with Iranian Foreign Minister Abbas Araghchi on Tuesday, calling for an immediate start to negotiations and an end to hostilities. caixinglobal.com/2026-03-24/chi…

On Tuesday, I testified before the House Homeland Security Committee on China's strides in robotics and AI. I warned that we lost solar, batteries, and EVs -- now we're at risk of losing robotics and AI. If that happens, it would irreversibly change the balance of power. Five points: 1️⃣ China aims to win the next industrial revolution. PRC leaders believe history is shaped by industrial revolutions. The first, steam power, made Britain dominant. The second and third, electrification and mass manufacturing, made America dominant. China is determined to win the fourth. 2️⃣ In robotics, China is already winning. In 2024, China installed 300,000 new industrial robots. America installed 30,000. China now has over 2 million robots in its factories — five times more than the US. A decade ago, it imported 75% of its robots. Today it makes 60% domestically. This year alone, China may spend $400 billion on industrial policy. The entire US CHIPS Act provided $50 billion across multiple years. If we fall behind here, U.S. reindustrialization becomes farfetched. 3️⃣ In AI, we're ahead — but selling off the advantage. China has more energy, more talent, and makes the edge devices. But America still leads because of chips, according to China's own AI companies. US chips are 4-5x better than China's today. We are debating whether to surrender that edge. 4️⃣ We are inviting risks of cyberespionage and catastrophic cyberattacks. PRC law requires its companies to cooperate with intelligence services and never disclose it. Today's robots carry LiDAR, microphones, and cameras — they are mobile surveillance platforms. But the bigger risk is cyberattack. We know China has compromised our power, gas, water, telecommunications, and transportation infrastructure in preparation for cyberattack. We cannot deploy robots in sensitive facilities from the very country targeting those facilities. 5️⃣ Here's what we must do. Extend ICTS rules to cover Chinese robots. Direct CISA to audit where they're deployed in critical infrastructure. Ban federal procurement of Chinese robotics and AI. Strengthen semiconductor export controls. Stop treating American AI companies with more regulatory scrutiny than Chinese ones. And build allied scale in robotics—a trading bloc with preferential terms for the members that can rival China's scale in in the sector. Thanks to @HomelandDemsIt and @HomelandGOP for the hearing on this topic, and grateful to join @MRobbinsAUVSI and colleagues from Scale and Boston Dynamics for a great discussion.

@michaellebowitz @sunchartist Is there any local data that can allow us to confirm these flows? Just curious

BREAKING: GOLD COLLAPSES AS ARAB GULF STATES SELL THEIR ASSETS TO RAISE MONEY Put differently, in this time of crisis, they are selling their gold in favor of US dollars.

@options_insight Fantastic. Really appreciate you sharing your wisdom!

𝗛𝗲𝗿𝗲'𝘀 𝗮 𝘀𝗶𝗴𝗻𝗮𝗹 𝗜 𝘁𝗿𝗮𝗰𝗸 𝘁𝗵𝗮𝘁 𝗺𝗼𝘀𝘁 𝗿𝗲𝘁𝗮𝗶𝗹 𝘁𝗿𝗮𝗱𝗲𝗿𝘀 𝗵𝗮𝘃𝗲 𝗻𝗲𝘃𝗲𝗿 𝗵𝗲𝗮𝗿𝗱 𝗼𝗳: 𝗳𝗶𝘅𝗲𝗱 𝘀𝘁𝗿𝗶𝗸𝗲 𝘃𝗼𝗹. SPX makes a new local low. VIX ticks higher. Looks bearish. But if you check the implied vol at a specific strike (say 6400), it's flat. Actually drifting lower. That divergence is the first crack. When spot is making new lows but the vol surface refuses to reprice higher at the same strikes, someone is stepping in to sell premium at those levels. The marginal seller of volatility has appeared. That's institutional money saying "this is overdone." VIX can stay elevated because of skew and term structure effects. But fixed strike vol is cleaner. It strips out the moving parts and tells you what's actually happening to risk perception and options supply/demand at a given level. In my experience, fixed strike vol rolling over while spot makes new lows has been one of the most reliable exhaustion signals I use. It often calls the turn before price does.

This is perhaps the best analysis I’ve seen so far offering an onshore Chinese perspective on Iran and the ongoing conflict in the Middle East. “China’s disillusionment with Iran’s leaders means that Beijing is not inherently opposed to regime change. Because its priority is to ensure that Iran remains a viable economic partner, it is largely regime-agnostic.” Western readers may find this assessment difficult to believe. But based on my own understanding and numerous conversations with contacts on the ground in China, it is fundamentally accurate. China’s interest in Iran - and the broader Middle East region - is first and foremost about energy security, not about geopolitical influence.

Offshore Chinese tech equities have lagged onshore tech equities, experiencing big drawdowns even as onshore equities make new highs. At the same time the China private sector services PMI is starting to improve. Suggests Chinse equities are primed for a rebound, maybe once the market gets some clarity around Iran.

Macro Risk Indicator still bullish. Growth + policy impulses slowing down. Macro Snapshot Mar. 26' (00:00) Introduction (00:48) Macro Risk Indicator Past Peak Bullishness (03:00) Amalgamated ’16, ’03, ’99 Still Base Case (06:42) Today vs 2022 energy shock (11:32) Taking Profit on Energy, Swap Into Healthcare, Tech/Financials OW (15:40) How Long Might the Iran War Go On For? (22:49) Trump’s Objectives (25:11) US Earnings Strong. “Sell America” Showing Signs of Excess (28:48) 10y US Yields Range-Bound Around 4% (32:19) USD Bottoming & Energy Shock to hit Overvalued 🇪🇺 FX (34:51) Gold Miners Still Appealing (36:43) Oil/Gas Rally Unlikely to Repeat 2022. (38:45) Summary

Some months our asset allocation engine stays quiet, but this isn’t one of them. We’re seeing a big pivot for Feb month-end: cutting our large Energy overweight to zero and rotating into Health Care (+10.5%). Taking profits on Energy after the YTD run feels intuitive, but Health Care is a different beast. It’s still firmly in the cross-hairs of politicians and it’s only becoming a more bi-partisan issue. On balance, the real alpha here is likely for the stock pickers. One of @michaeljburry ‘s first Substack posts was a bullish take on Molina Healthcare $MOH. It’s about finding the names that have a margin of safety while being more insulated from the political risks.

Divergent price action YTD has shifted our sector allocation models. After the rally in Energy and Staples, these sectors are now fairly valued—and even a bit expensive on our models. The margin for error there has narrowed significantly. At the same time, the model still sees the most upside in Tech and Financials. These offer a nice mix of secular growth and cyclical value, but where fears over AI and credit card interest rate caps have weighed on prices.