Hope you’re all doing well.

We’ve been extremely busy over the past few weeks as markets continue to operate in what, historically speaking, remains a fairly extreme regime in several respects.

Despite the data continuing to point toward a potential new all-time high for the S&P 500, we’ve been using the recent up days to gradually add hedges for the next couple of months. We’re heading into a traditionally choppier period, and at this point, we would rather be overly cautious than get caught off guard.

It’s entirely possible that the S&P 500 reaches somewhere around 8,000 before experiencing a meaningful pullback. It’s also possible that the market never gives us that pullback at all. We can’t predict which path it will take.

You can’t predict, but you can prepare.

Jackson Hole and the Fed

At Jackson Hole, Warsh sounded considerably more hawkish than the market had been pricing in.

My sense is that many market participants didn’t take his comments seriously at first, particularly given that he was hand-picked by President Trump and Treasury Secretary Bessent. If the Fed ultimately does not hike rates in September, he could face a meaningful credibility problem given how forcefully he spoke about inflation and monetary policy during his speech.

There is, however, one important alternative explanation.

Warsh may already have had a good sense of the macroeconomic data that will be released over the next two weeks. If that data ultimately reduces the case for a September hike, particularly through a weaker employment report, then he could afford to sound significantly more hawkish at Jackson Hole.

In that scenario, the speech may have been partly about establishing his independence from the executive branch and making it clear that inflation remains a priority, even if the incoming data ultimately gives the Fed a reason not to hike.

Beyond that possibility, it is difficult to explain why he would have chosen to project such a strong commitment to fighting inflation if he were not genuinely concerned about it.

Either way, the next couple of weeks should be important. The market may have to reconcile a much more hawkish Fed narrative with whatever the incoming economic data tells us.

An Update on the Website

We also want to apologize for the many delays surrounding the launch of the website.

The original idea was fairly simple: we wanted to share our investing philosophy, research tools, and the broader toolbox we use internally. Substack is not necessarily the ideal format for that. We follow hundreds of tickers, and constantly posting screenshots or long lists of symbols isn’t particularly useful when the underlying data changes continuously.

Unfortunately, the commercial data licensing requirements turned out to be far more complicated, and far more expensive, than we initially anticipated.

The public-display license alone would cost more than six figures per year, before accounting for cloud infrastructure, legal expenses, and other operating costs.

That fundamentally changes the economics of the project.

Our original intention was never to build another business. We wanted to make the tools available at a very low cost, essentially as an extension of what we were already doing, rather than turning it into a full-time commercial venture.

But with a six-figure annual baseline cost just for data licensing, there really isn’t a sustainable way to operate it as a casual side project.

And that creates a difficult problem: the economics required to make the website viable could undermine the very reason we wanted to build it in the first place.

What Happens Next

In the worst-case scenario, we may have to abandon the website entirely if we cannot find a reasonably priced solution for the commercial data licensing.

That said, we’re still actively looking for alternatives.

Our goal for Phase One remains the same: launch a useful service at a very low cost. If the community finds it valuable and there is enough interest over time, we would certainly be open to turning it into a proper business and investing in significantly richer features, data, and research.

But we don’t want to start there.

We want to start small, keep it affordable, and see whether people actually find the tools useful.

We’ve also refunded everyone who tipped us in exchange for the price-lock discounts. According to Stripe, refunds should arrive within 9 business days. If you have not received yours after that period, please reach us at statquants at gmail dot com and we’ll look into it.

We’re still hopeful that we can find a workable solution and get at least a beta version launched before Christmas.

Given our workload over the coming weeks, we may not be posting as frequently as usual, but we’ll continue to keep you updated as we make progress.

In the meantime, if you haven’t already done so, please manage your tail risk heading into mid-September.

We may be wrong about the timing. We may be wrong about the direction. But being prepared for an unfavorable outcome is very different from predicting one.

Stay safe out there.

Over the past few weeks, we’ve been almost entirely focused on testing our model in what has become one of the most unusual market environments we’ve seen in decades. This hasn’t just been about price action, it’s been a rare combination of positioning, sector rotations, macro uncertainty, and AI-related flows all occurring at the same time.

Last Thursday finally felt like a turning point.

It appears that Leopold Aschenbrenner, often called the “Nostradamus of AI”, fully exited his public portfolio and sold it to Citadel. In hindsight, his positioning seems to have been one of the major forces behind the recent collapse in SaaS stocks alongside the powerful rally in semiconductors.

The past few weeks were admittedly challenging for us.

We maintained a 5x long position in Microsoft and, at one point, increased it to 8x. While we were not using leverage, Microsoft declining almost every day for weeks was psychologically exhausting. We came very close to selling the position just one day before the reversal, largely because it had become such a drag on our reported performance.

Financially, the damage was manageable. At its worst, the position was down roughly 6%. The larger cost was the constant attention it demanded. Defending a high-conviction position is difficult when the market refuses to give you even a single up day for weeks.

Fortunately, the final piece we had been waiting for arrived: the end-of-month rotation. As expected, capital rotated out of semiconductors and back into software and the Mag 7.

As Microsoft recovered, we gradually reduced our exposure from 8x to roughly 4x ahead of earnings. Ultimately, we exited almost the entire position for approximately a 28% gain and replaced much of the exposure with short puts the day before earnings.

The decision was primarily about risk management. the cost of defending the position into earnings, with the possibility of a 10% downside gap, no longer offered an attractive risk-reward profile. More importantly, we were seeing significantly better opportunities elsewhere, situations where we believe 40% returns over the coming months are achievable, even after assuming severe downside scenarios driven by market fear.

So far, execution has gone largely according to plan.

We accumulated several high-quality assets just before the recent rebound and added meaningful exposure to memory-related stocks where we believe the downside is protected by roughly 90% to 100% while the upside remains in the 40% to 60% range.

It’s still too early to declare that the correction is over. However, the recent bounce has at least broken the persistent downward momentum that dominated sentiment for weeks. It has also allowed us to add inexpensive downside hedges, giving us the flexibility to remain patient while the market reveals its next direction.

Finally, we’d like to provide an update on our website launch.

Unfortunately, we’ve encountered an unexpected delay. When our market data provider renewed its agreement with the exchanges, the licensing terms changed. As a result, the provider could no longer offer the same historical dataset because its own cost for that data increased by roughly threefold.

We’re currently working on finding a suitable replacement data source and hope to have a solution soon. We sincerely apologize for the delay and appreciate your patience as we complete the transition.

Every week brings a new bubble narrative or a new wave of bullish excitement. Which side dominates the conversation usually depends less on fundamentals and more on how prices have moved over the previous two weeks. Market sentiment often swings far more aggressively than the underlying data.

Rather than getting caught up in those narratives, we focus on the opportunities that extreme sentiment creates.

One of our favorite setups is when the market prices outcomes so aggressively that we can construct trades with highly asymmetric risk-reward profiles. Recently, we executed another trade in Micron (regardless of entry price) that illustrates this concept once again.

Without revealing the exact structure of the position, the trade offered a potential return of at least 10%, with upside approaching 40%, regardless of whether the stock eventually traded at 0 or 1 million per share. Opportunities like these are rare, but when they appear, we size up aggressively as long as we can obtain favorable pricing.

Our objective isn’t to predict where the market will go next. It’s to exploit pricing inefficiencies whenever fear or euphoria pushes options beyond what the underlying probabilities justify.

Historically, we’ve found that the odds of a major market correction remain relatively low until these kinds of extreme pricing distortions begin to disappear. As long as irrational optimism and pessimism coexist, arbitrage opportunities tend to remain abundant.

Micron trade example (position details intentionally omitted).

Prudence Will Always Be Rewarded

Over the past year, we’ve intentionally kept our exposure to the hottest AI names relatively small. We’ve consistently shared our concerns about how quickly many of these companies appreciated. While earnings have certainly grown, in many cases stock prices have risen even faster. Eventually, the math stops working.

Many of the developments we discussed a year ago are now unfolding.

Corporate share buybacks are beginning to slow. More importantly, Alphabet recently announced its first secondary equity offering in more than two decades. If capital needs continue to rise across the industry, we wouldn’t be surprised if other large technology companies eventually follow a similar path.

Many of these businesses have already committed the majority of their cash balances and free cash flow toward AI investments, with little indication that capital expenditures will decline anytime soon.

During Thursday’s selloff on , we positioned for investors to rotate out of crowded winners and into some of the lagging members of the Magnificent Seven. We expressed this view through short-term tactical put ratio spreads. The trade worked as expected, we were able to buy back the short puts while effectively keeping the long puts with a small credit, this will be our last attempt to court the position before earnings.

Looking ahead, we remain cautious on Microsoft. If additional equity issuance becomes necessary across the sector, the market could react negatively, particularly after such an extended rally at the index level. Combined with recent capital-raising activity, including SpaceX’s IPO-related transactions, bond issuance, and other secondary offerings, we’re seeing more companies competing for an increasingly limited pool of investor capital.

We’ll be watching Microsoft’s price action closely over the next several weeks. If the stock continues to weaken into early July, we’ll reassess our exposure and may reduce or exit the position entirely in favor of more attractive opportunities elsewhere.

One of the most important lessons in investing is that being early is often indistinguishable from being wrong. Timing matters, and the market rarely rewards conviction alone.

Although we’ve actively traded around many of the AI leaders, we’ve generally taken profits quickly after sharp moves of 50% to 200% within days or weeks. It’s difficult to maintain large, high-conviction positions when prices become nearly vertical.

Fortunately, our discipline has paid off in another area.

We’ve consistently argued that AI is a transformational theme, but not at any price. At the same time, we’ve repeatedly highlighted healthcare throughout the second half of 2025 as an overlooked area with durable long-term fundamentals. While attention remained focused on AI, many healthcare names quietly generated strong returns since.

The market continues to remind investors of a simple truth: patience and prudence are often rewarded more consistently than chasing the hottest story of the moment.

You don’t need to own the most popular stock to generate outstanding investment returns.

In today’s highly managed and policy-driven market environment, positioning and flexibility remain critical.

We don’t usually highlight our gains or losses, but from time to time it serves as a useful reminder that being aggressively bullish or bearish in only one direction can be costly. We navigated the April 2025 correction well, and similarly benefited from last week’s sharp pullback, which marked the S&P 500’s largest single-day decline in several months.

More importantly, our focus has been on building a portfolio that can benefit from large market swings in either direction. Over the past week, we closed a significant portion of our short call exposure and shifted to a slightly long delta position, taking advantage of what we viewed as crowded and offside positioning. Based on the latest data, the market could continue pushing higher into the end of this week before facing renewed selling pressure the following week. As always, we’ll let the data guide us. With headlines moving markets on a daily basis, maintaining flexibility remains essential.

On the long side, we increased our position in MSFT and would likely continue adding on weakness. We still believe fair downside support sits somewhere in the $325–$350 range. Microsoft remains our largest position and, ironically, has also been the biggest drag on our performance this year.

That said, we don’t believe the current AI cycle is nearing its end. At a minimum, we expect enthusiasm to remain elevated through potential IPOs from OpenAI and Anthropic, and possibly beyond as additional supply enters the market in the months that follow. Of course, market dynamics can change quickly. If major AI beneficiaries or large-cap technology companies begin aggressively monetizing investor demand through secondary offerings, sentiment could shift in a matter of days.

For that reason, we remain agile. We have little interest in chasing popular AI names simply because they are moving higher.

The exception is when option pricing becomes completely disconnected from reality. We saw this in names like MU, SNDK and MRVL, where the market occasionally offered setups that were almost impossible to dislike from a risk-reward perspective. These weren’t directional bets. The payoff structure was such that whether the stock went to zero or rallied dramatically higher, the position could still generate attractive returns. When opportunities like that appear, we will take them every time.

These situations are extremely rare and usually occur when positioning becomes so crowded that the options market starts pricing risk inefficiently. We took advantage of them when they appeared and will continue to do so if they return. What we won’t do is blindly chase AI stocks simply because they are going up.

We’ve been quiet for a while, but we certainly haven’t forgotten about you.

Over the past several weeks, we’ve been intensely focused on what we believe is one of the most unusual market environments of the last three decades, a setup that only appears in the top fraction of market regimes. Opportunities like this are rare, which is exactly why we’ve spent so much time stress-testing our models, refining our thesis, and actively managing risk.

Portfolio Updates

Among the positions we’ve previously discussed, we closed our Meta short position for approximately a 12% gain while leaving our Microsoft long position untouched.

We also trimmed roughly half of our Google position following the post-earnings rally, locking in gains after the stock’s sharp move 10% higher.

In addition, we’ve been selectively increasing exposure to several software companies through a combination of long stock, long call, and aggressive short-put structures. One example is ServiceNow, where one of our options positions reached a peak gain of roughly 1,500%. Following the recent pullback, the position remains up approximately 700% with substantial time remaining until expiration.

Oxygen Is Getting Thin

Initially, we believed concerns surrounding the SpaceX IPO were somewhat overstated. Large IPOs can create temporary liquidity pressures and often contribute to short-term market pullbacks, but a $75 billion offering, while significant, did not appear large enough to materially disrupt overall market liquidity, especially given the extensive advance notice investors had to prepare.

What we did not fully anticipate was the extent to which Google would accelerate the market’s focus on liquidity.

Google’s recent $85 billion issuance effectively offset a substantial portion of the stock it repurchased over the previous two years. Combined with our earlier observation that Meta’s buyback activity had already been slowing, and most recently turning net negative. The market is beginning to confront a possibility it hasn’t had to consider for quite some time: what happens when major technology companies transition from being consistent buyers of their own stock to becoming net sellers?

We highlighted the slowdown in Meta’s buyback activity back on March 1, but Google’s actions have brought the issue into much sharper focus.

This dynamic resembles historical capital races such as Uber and Lyft, where companies sought to raise as much capital as possible in order to strengthen their competitive position. If several large-cap technology companies decide that preserving liquidity or raising capital is strategically advantageous, investors may begin to question whether buybacks can continue providing the same level of support they have over the past few years.

Markets often front-run future buybacks. If those buybacks become less certain, investors may not necessarily turn bearish, but they may become less willing to aggressively chase prices higher because they know big supply is ahead.

And that matters, particularly during what is traditionally a thinner summer trading period.

Searching for the New Fed Chair’s Red Line

As rates continue moving higher, our current positioning would likely have us interested in adding exposure to both the 2-year and 10-year Treasury markets under the right conditions.

While additional tightening remains possible, we believe 75 basis points would likely represent the upper end of any realistic hiking cycle. The Federal Reserve can ease policy in 25-basis-point increments, but historically tightening cycles often occur in larger steps when policymakers feel compelled to act decisively. If hikes return to the table, 50- and 75-basis-point moves would likely become the focus.

Should that scenario unfold, we believe the market could easily experience a 5% pullback as investors attempt to identify the new Fed chair’s true policy boundaries.

The key question is whether Warsh ultimately proves to be aligned with the White House’s priorities or whether he emerges as a more independent policymaker, similar to the version many investors remember from the post-2008 GFC era.

The market will likely test that distinction sooner rather than later.

Website Update

For those asking about the website, development continues to move forward.

September is probably the most realistic launch target at this stage, although we’ll keep everyone updated if that timeline changes. The good news is that many of the lessons, research insights, and market observations we’ve accumulated over the past several weeks will be incorporated directly into the new platform.

We’re excited to share more when the time comes.

Thank you for your continued support, and good luck to everyone navigating these markets. We’ll do our best to provide updates more regularly going forward.

Some of you reached out asking about our market view. Apologies for the delayed update, we meant to send this out on Sunday. We’ve been heads down testing new strategies and algorithms, some of which we plan to share with our partner on the new platform, as mentioned previously.

Positioning & Overall Stance

Our overall stance remains unchanged: cautious on short delta and premium, while selectively leaning long through relative value trades and companies.

Oil & Commodities

On positioning, we closed our oil longs into the spike and briefly flipped short ahead of the truce headlines. We’re now flat oil. From here, we’re looking to either build longer-dated exposure around ~$75 or sell puts to own it lower, assuming the vol justifies it. Our view is that supply destruction will last longer than many expect due to Iran’s bombing. We’ve also exited our metals shorts.

Relative Value: Microsoft vs. Meta

In equities, we’re continuing to run the relative value trade: long Microsoft vs. short Meta. The position is no longer 1:1, it’s closer to 3:1. We’ll look to add back to the Meta short on strength to move toward parity. If that doesn’t happen, we’re willing to absorb some downside if Microsoft trades lower. This may not be the bottom, but we think another ~20% downside would likely exhaust the move.

On navigating the war-driven volatility, we prefer structuring trades ~45 days out to maintain flexibility. At current vol levels, this provides room to adjust if markets snap back into a V-shaped recovery, though that is not our base case. As we famously know, the magic words are “another 2 weeks”.

Why This Couldn’t Easily Be “Resolved”

We were wrong on the tariff “TACO” dynamic, but managed to pivot long in time, albeit late. We could be wrong again, but here’s how we’re thinking about the current situation:

1. We don’t believe events of this magnitude can be easily “TACO’d” away. The US eliminated the Supreme Leader and most of his family; now, his son is the new Supreme Leader for Iran. There may be pauses as both sides refocus on immediate priorities (e.g., U.S. mid-term elections or Iran rebuilding depleted resources), but the underlying conflict likely persists for a long period of time.

2. This war has structurally changed the region. What was once considered just a threat, the closure of the Strait of Hormuz, now needs to be taken seriously. The scale of destruction and instability will likely push regional players to act more decisively in securing long-term interests to remove such a threat.

3. Historically, periods leading into truce discussions often see further escalation before de-escalation. That said, conflicts can still end abruptly, just like in 2025 again.

Market Structure Right Now

Mechanically, the market is now sitting in a supportive flow regime, where the upside risk is greater than the downside, ironically in the near term (2 weeks). However, if the anticipated V-shaped recovery fails to materialize, the downside could be just as fast as the upside, especially after many participants have removed hedges and moved back into risk.

If this bounce is real, our view is that a large portion of it, perhaps ~80%, has already played out. We started the decline before the war even took place. The war might be “over,” but it wasn’t even the main declining factor.

Don’t overfocus on short-term noise. Before placing a trade, ask yourself: if the war escalates or ends tomorrow, would it change your decision? If yes, size smaller or skip the trade. If the constant stream of conflicting narratives is affecting your judgment, it’s better to tune it out.

What Actually Still Matters

Regardless of the war, key issues remain unresolved: AI spending sustainability and private credit liquidity. Many AI-linked names, such as Microsoft, ServiceNow, Apollo, and Blue Owl, are still trading near recent lows.

Stay cautious, over-trading can be exhausting, take a break and find some unnoticed, easier wins.

Hi everyone,

This morning we canceled all paid subscriptions for existing members.

We’re incredibly grateful for the support you’ve shown us, but we believe you deserve a better product and experience than what we can currently provide.

When the new platform goes live in a few weeks, we hope you’ll consider checking it out and supporting our partner, though there is absolutely no obligation to do so. At the very least, we strongly encourage everyone to try the free version and provide feedback, which will help our partner continue refining and improving the platform.

Over the next few weeks, we’ll share instructions on how to redeem the lifetime discounted membership we mentioned previously.

All existing and previous paid subscribers on or before March 15, 2026 will receive an invitation to join the new platform at a lifetime rate of $9/month for full “Pro” access.

The basic functionality of the new platform is already in place. Our partner is currently working on connecting the different components so the platform becomes genuinely useful, allowing users to extract actionable insights that can support their decision-making before the private beta launch.

We’ll keep everyone updated as we get closer.

Market Update

Our overall market view remains largely unchanged. We were slightly short delta going into this OPEX, and turned slightly positive delta on Friday’s close.

Structurally, we remain:

• Slightly short delta in the front months

• Long spreads and butterflies in the back months

We believe the market may be approaching a short-term TRADABLE bottom around 6,550, assuming the geopolitical situation does not escalate dramatically. Financials stabilized somewhat for the first time in a while last Friday, which is notable.

Because of that, we added some long delta in the back months. In a worst-case scenario, the market could still fall another ~2.5% before the end of the week. If that happens, we may close some of the short call legs in the back months and position for a sharper rebound.

Over the next few months, there is still considerable uncertainty. Higher oil prices could easily bring recession narratives back into focus.

We don’t claim to know exactly how this will resolve, but our approach is straightforward: add downside hedges whenever we see strong rallies. Until both geopolitical and financial conditions improve, the risk skew likely remains to the downside.

Portfolio Positioning

We are not running large directional exposure right now, as mentioned previously.

Current positioning includes:

• Slightly short delta in S&P 500 options

• Short-term futures positioning used tactically to keep overall exposure close to neutral

The focus right now is on relative value rather than outright directional risk.

$SPX

Relative Value Trade

Long Microsoft / Short Meta & Apple

Commodities

We’re not doing anything particularly aggressive here either.

Oil

We’re selling some delta/premium in oil, with the view that the floor is likely somewhere in the $70–$80 range. We don’t know where the top is either, so we’re keeping positions small and flexible.

Previously, we bought dips around $82, and we still don’t believe oil can fall much in the near term.

The SPR release represents only a fraction of the demand destruction currently priced in. In our view, Europe and Asia are far more exposed to higher oil prices than the U.S., which is in a structurally stronger position.

Metals

We suspect metals may have reached a short-term top.

If the current Iran tension and oil-inflation narrative can’t push gold significantly higher, it likely requires something far more extreme, essentially a WW3-type scenario, to drive the next major leg up.

Our approach for now:

• Short silver

• Potentially add gold longs together with short silver when conditions line up

For the market’s next directional signal, financial stocks will likely be a better indicator than the geopolitical headlines about the war.

It’s a bit late here, so I’ll keep this short. Hope everyone has a great week.

We know there’s elevated anxiety after the U.S.–Israeli strikes on Iran over the weekend. Geopolitical shocks always feel destabilizing in the moment. The constructive takeaway, at least so far, is that this was a well-telegraphed event and the market came in relatively well hedged.

During tonight’s S&P futures session, ~6,800 looks like the first key support and it’s holding in the current session. SPX’s 6,800 and 6,700 would be the next meaningful levels. Below that, support appears thin until the 6,500 and 6,000 areas. That doesn’t mean we go there, only that if downside accelerates, the air pocket could be larger than many expect.

It’s also worth remembering how quickly sentiment can flip when markets sense de-escalation. During the 12-day Iran–Israel conflict in mid-June 2025, once investors began to sniff out an endgame (June 13–24), the S&P 500 rallied more than 2% in just two days from the June 20 close. Markets move ahead of headlines.

That said, no one should underestimate the tail risk, and we should not be overconfident in scenarios involving large-scale war like this one. If this conflict is to end, either:

• A successor from the existing regime will likely need to retaliate to establish credibility domestically, or

• A genuine internal shift in power would have to unfold, which takes time and rarely follows a straight line.

Both paths imply uncertainty, even if markets are currently calm.

Focus on Companies, Not the Headline

Rather than trading the one-off event itself, we prefer to focus on company-level opportunities — taking advantage of bounces or dips depending on your view and time horizon.

Here are the themes we’re watching closely:

AI: The Theme Is Intact, But the Market Is Getting Pickier

The AI theme isn’t going away anytime soon. But the market’s behavior is changing.

When companies like Meta, Amazon, and Google ramp CapEx aggressively and the market no longer rewards them automatically, that’s a signal. When Anthropic releases a feature and an entire cluster of stocks sells off in sympathy, that’s another signal.

The mega-cap CapEx trade was one of the most transparent trades for some time. But it has also become transparent that debt is rising, cash balances are draining, and free cash flow is fading for many of these companies. Investors are beginning to ask harder questions about return on invested capital.

If people wonder why Nvidia sold off even after a blowout quarter, it may not be about fundamentals deteriorating. It’s more likely that large funds and major shareholders are trimming exposure at the margin. When positioning becomes crowded and expectations are extremely high, even great numbers can trigger profit-taking, especially if investors want to see clearer long-term revenue expansion to justify the scale of current spending. After the top 10 biggest companies bought their GPUs (who’ve used the majority of their buying power), who are next in line?

At these price levels, investors are no longer blindly confident. Capital allocation discipline is back in focus. The question is shifting from “Who’s spending the most?” to “Who’s earning the most on that spend?”

Free Cash Flow, Debt, and the Evolution of the Mag 7

For years, many mega-caps were miracles:

• Asset-light

• Net cash positive

• Massive buybacks

• Expanding free cash flow

That picture is changing.

With the exception of Apple and Nvidia, several of the large-cap leaders have:

• Reduced buybacks

• Increased debt

• Seen free cash flow compress relative to peak levels

Apple is an interesting case study. Not long ago, it was criticized as the “AI laggard” for not spending aggressively enough. Today, the narrative has flipped. The market views it as disciplined and strategic, rewarding it with ~31x forward earnings, the highest multiple in the group excluding Tesla (300x, not the right metric anyway).

The market likely won’t abandon these companies easily. They remain structurally important, not just to the index, but to sentiment. Even as they underperform as a group, there is institutional and macro pressure for them to stabilize the broader market.

Within that context, we have positioned long MSFT and short META, effectively choosing the relatively more resilient business against one facing greater capital allocation scrutiny, or if both would go down, it’s a less bad versus bad situation.

The “493” vs. Tech

When we say “493,” we mean the S&P 500 excluding the major tech leaders.

Since 2026 began, the 493 has outperformed by a wide margin. But at current levels, the risk-reward may be deteriorating if the index is to push materially higher.

This feels late-cycle: capital rotates out of tech, but there’s no clear destination. Many of these 493 names now trade at richer multiples than tech, despite lacking comparable moats or structural growth.

We struggle to see how those valuations are sustainable long-term.

Buybacks: Headline vs. Reality

One area where nuance matters is share repurchases.

Over the past twelve months:

• Meta repurchased $26.2B of stock, but also issued $20.4B in new shares. Net buyback: only $5.8B.

• Apple executed a “true” buyback, with new issuance equal to just 14.37% of its repurchase volume.

• Meta’s issuance was 77.86% of its buyback amount.

Big announcements don’t always translate into meaningful share count reduction. Net impact matters more than headline numbers.

We’re also excited to share a sneak peek of the new site our partners are building, including an upgraded earnings calendar and deeper company-level analytics you saw above. This is just the initial beta — much more is coming.

Enjoy the rest of your weekend.
As always, feel free to reach out with questions about the market or the new platform. Once the site goes live, you’ll also be able to connect directly with the operator.

We owe you a real update.

You probably noticed we went quiet on our weekly market notes without warning. That’s on us. Some personal matters needed our full attention, and while we handled them, we should have communicated more clearly with you. Thank you for your patience and for sticking with us during the silence. Your time and trust mean a lot, and we never take that lightly.

For our paid subscribers: your support has always been appreciated. Even though those subscriptions were treated as tips and everyone received the same content, we’re more than happy to refund for the month if you’d like. Unfortunately, Substack only allows refunds by canceling the subscription entirely. If you’d like a refund, just email us; no explanations needed. We’ll take care of it right away.

We’re Back, and Building

The good news: we’re back, things are settled, and we’re getting close to launching an early private beta of our website.

The goal is simple: a dedicated home for the charts, models, and analysis you’ve been reading here. Rather than wait until everything is perfect, our partner has decided to launch a focused MVP first and improve it iteratively with your feedback.

What happened to the January launch?

We were too optimistic about the timeline. Moving from publishing on Substack to launching a standalone platform turned out to involve far more legal, structural, and administrative work than we initially expected. Between setting up a new entity and making sure everything is properly handled on the compliance side, there were simply more moving parts, and more paperwork, than anticipated.

After careful thought, we decided to separate the new platform into an independent company run by our partner. This keeps economic and legal responsibilities cleanly structured and allows the new entity to obtain the necessary data licenses without complicating our current setup. We’ll continue contributing research, trade ideas, and algorithmic work behind the scenes.

Once the site is live in private beta (early March to be conservative), we plan to publish updates directly using the platform rather than maintaining separate systems. It’s more scalable, more flexible, and ultimately a better experience. A dedicated platform allows content to be distributed more efficiently and reliably without adding operational friction when markets demand our attention.

What to Expect at Initial Launch

The platform is being bootstrapped with limited resources. No salaries are being taken. That said, there are real costs involved:

• Public-use licensing and compliance

• 24/7 world-class infrastructure provider

• CDN delivery for speed and reliability

Given these constraints, some datasets will not be included at launch. Forward-estimated metrics and broad index-level data such as SPX will be phased in later as the platform scales.

Because of these ongoing costs, the website won’t be entirely free. We aim to keep as much high-quality free content accessible as possible, while reserving full features and complete datasets for paying subscribers due to the operational cost. A monthly subscription will help sustain and improve the platform over time.

Special Pricing for Existing & Previous Paid Subscribers

Over the past year, paid Substack subscriptions were simply a way to support our work. Paid subscribers received the exact same content as free readers, and we are truly grateful for that generosity.

As a thank-you, all existing and previous paid subscribers on or before 3/15/2026 will receive an invitation to join the new platform at a lifetime rate of $9/month for full “Pro” access.

For new users after launch, the “Pro” tier price will be $59.99/month, which reflects the upfront costs of building and operating the platform properly. As we grow and scale, our goal is to create more flexibility around pricing over time.

When private beta begins, eligible subscribers will receive:

• A private invitation

• A special promo code to lock in the $9 lifetime rate

If you choose not to move over, that is completely fine, and no action is required. If you have any questions during the transition, just reach out. We sincerely appreciate your support and patience as we make this shift.

We understand this is a lot to take in. There is absolutely no rush to make any decision. When the private beta launches, you’ll have a two-week free trial with no credit card required, so you can explore the platform and decide whether it fits your investing and trading approach.

Thank you again for your continued support. We’re excited about what’s ahead and grateful to be building this next chapter with you.

For those wondering what we’ve been doing recently, we are not running any large directional exposure at the moment. We’re carrying slightly short delta on S&P 500 options, balanced with shorter-term futures positioning to keep overall exposure relatively neutral and tactical.

We have also initiated a relative value trade: long Microsoft while short Meta and Apple. There is a lot to consider here. Without clear leadership, the Mag 7’s capacity to continue aggressive buybacks becomes less predictable, and that uncertainty can spill over to the broader index level, ultimately affecting overall confidence.

Below is a brief high-level preview of what will be included in the initial launch; much more to come.

If you have any questions, thoughts, or concerns, please email us at:

contact [at] statquants.com

Hope everyone is having a great holiday season and getting some quality time with loved ones.

We’re getting close to launching an early beta of our site in the coming weeks. Before that, we want to pause and say thank you to all of our subscribers, especially those who supported us through paid subscriptions. Your support is what made this possible.

Many of you have continued to back us even as we shifted our focus away from the weekly newsletter and toward building the platform. The scope of work turned out to be far larger than we initially expected. We’re incredibly grateful for your patience and trust. Truly a big thank you.

Looking ahead to next year, we don’t have strong convictions yet. We think the market has entered a trickier phase, shaped by both macro forces and the evolving AI narrative. Street consensus still leans bullish, Bank of America at 7,100 and Morgan Stanley at 7,800 for 2026, but we’re not a big firm chasing year-end targets. We don’t feel the need to force a call just for the sake of having one. Instead, here are a few areas we’re paying close attention to:

AI: from buildout to monetization
We think the AI story will eventually shift from infrastructure spending to monetization. Investor patience is wearing thin, or perhaps gains simply came too fast and too much. More CapEx alone may no longer be enough. The next leg higher likely requires real applications, business models, or services that can clearly monetize AI. For now, Nvidia remains the only company benefiting in a truly material way.

Unemployment: watch the rate of change, not the level
The rate of change in unemployment matters more than the absolute level. A gradual cooling gives the Fed room to cut and calm markets, but unemployment rarely rises in a smooth, linear way. AI complicates this further. If AI adoption succeeds, we may see layoffs among tech workers before roles and skills rebalance in a post-AI world. That adjustment, both in employment and wages, could take quarters or even years.

If AI fails to deliver expected returns, spending and buildouts could slow sharply. That would also lead to job cuts, especially as big tech has already been leveraging up balance sheets through bond issuance. It’s hard to imagine continued aggressive spending without clearer visibility into AI returns.

Inflation: mostly behind us, but not gone
We think the inflation story is largely in the rearview mirror. Inflation levels are still elevated, but the Fed is focused on the rate of change. It would take a lot going wrong for inflation to reaccelerate meaningfully in the short term. Tariffs, for now, look more like a one-time, transitory shock unless tensions escalate again. With midterm elections in focus, there’s limited room to impose any additional policies without immediately hurting consumers.

A more subtle risk is complacency, letting our guard down during this “transitory” phase. Over time, monetary inflation (declining purchasing power alongside rising nominal dollars) could reassert itself, forcing the Fed to step in again and end whatever bull market exists at that point.

Geopolitics
On the surface, things appear calm, but it feels unusual how many tense situations have faded without a clear resolution. It’s as if major conflicts are being brushed aside rather than properly addressed, calm, but fragile.

IPOs
A wave of large IPOs would be a major top signal for us. New issuance tends to pull liquidity from an already fragile and highly levered market structure.

As shared in our last post, we’ve initiated our first batch of short delta positions during the recent boom. Position sizes remain small, and we’ll continue to adjust as conditions evolve.

Finally, here’s another preview of what’s coming. There’s much more in the pipeline, and we’re excited to share the platform with all of you in the weeks ahead.

Wishing you a very happy New Year and a successful 2026.

Hope everyone had a great Thanksgiving.

The market bounced, and that part shouldn’t surprise anyone. What did stand out was how quickly and how far it rebounded, bringing us back to within striking distance of all-time highs. Once again, rate-cut expectations are front and center, even though they were the original catalyst for the recent pullback.

At times it feels like the Fed has an unofficial third mandate: when markets draw down more than ~5%, someone has to step in, not just to reassure investors, but to actively push prices higher, regardless of how far we’ve already gone up. Seasonally, November and December are rarely market tops, so it’s reasonable to assume we finish the year toward the upper end of the range.

If the Supreme Court were to strike down the White House’s tariff actions as they hinted recently, the S&P could rip through the 7,000 level with surprising ease. Regardless of how the story ultimately plays out, that headline alone could act as jet fuel for a year-end rally. Still, a Santa rally is never a guarantee, and it’s not something investors should blindly depend on.

If we do get a strong year-end push, we’ll likely start building some downside exposure, either through shorts or deep in-the-money straddles targeting mid-2026. Profit-taking could pick up as soon as the new year starts for tax and other reasons, and while another fourth straight year of large double-digit gains is possible, the risk-reward increasingly favors some defensive positioning. If the market accelerates higher in a dot-com-style melt-up, we’d likely scale up those short positions gradually, unless fundamentals materially change and force a reassessment of our thesis.

On the product side, we’re working hard on the site. There’s a chance launch slips into January, but the good news is that options gamma data will be included as part of the initial offering. We’re still aiming for an early beta by the end of December and will share updates as we get closer.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of Dec 08, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-12-08: PM
2025-12-09: AM
2025-12-09: PM
2025-12-10: AM
2025-12-10: PM
2025-12-11: AM
2025-12-11: PM
2025-12-12: AM

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S&P 500 Sector Breadth

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The past three weeks have felt volatile, with an average swing of about 3.5%. Yet we’re still only ~4% off all-time highs, and outside of the big reversal after Nvidia’s earnings, not much panic.

Technically, a bounce is the consensus expectation. We’re sitting near the 50-day SMA, and the Mag 10 are only a few percent above their first meaningful support levels. That sets up next week as a good window to reposition based on your market view.

If you’re bullish, there may be a quick head fake early in the week before a push back above the 50-day SMA. If you’re bearish, that bounce could be your entry to re-establish shorts or sell premium if you missed the earlier move.

The bullish structure has definitely weakened. A run to 7,000 becomes less likely if we chop around this zone for another week. At the same time, you can’t lean too bearish either — it only takes one headline or tweet to gap us back above the 50-day, and from there you’re roughly 2% from ATHs with all the bullish narratives back on the table.

We still lean toward a December cut. Everyone is effectively auditioning for next year’s Fed chair seat, or signaling loyalty to the White House — so a 50 bps “trial balloon” wouldn’t surprise us. If they actually deliver 50 bps, markets can interpret it as “things must be bad” and sell off. If they don’t, markets can be disappointed and sell off. Either way, the setup forces the Fed to follow through or commit to more cuts.

We added some index-level call spreads and will likely sell straddles or iron condors against them on pops. The bullish structure is dented enough that even the “this is 1997” crowd is acknowledging the possibility of a full 10% pullback toward ~6,300 before ramping again. 6,500 is the key level we’re watching — three closes below it, and Santa may not show up this year.

It’s a short holiday week ahead. If we’re traveling, we may skip next week’s update.

Happy early Thanksgiving to those celebrating, and safe travels.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of November 24, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-11-24: AM

2025-11-24: PM

2025-11-25: AM

2025-11-25: PM

2025-11-26: AM

2025-11-26: PM

2025-11-27: AM

2025-11-28: AM

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Nvidia Earnings: Still the Market’s Swing Factor

It felt like another volatile, uneasy week - but the S&P actually finished slightly positive (+0.08%). We’re finally seeing a few cracks, yet there’s still surprisingly little conviction from investors who want to short the market or call for a breakdown. Under the surface, the action has been relatively healthy: participants are trimming speculative tech and rotating toward companies with stronger fundamentals, something we’ve been highlighting in recent weeks.

Back on Nov 2, 2025, we wrote that if Oracle fully gave back its 40% one-day spike, it would confirm we’ve entered a phase where investors are no longer blindly chasing AI-linked names. That’s exactly what happened. Selectivity is returning.

META and ORCL together have become a useful gauge of where investors’ AI enthusiasm stands.

On August 10, 2025, we mentioned that Health Care was worth buying. The sector has held up even as the broader market wobbled in the past couple of weeks. Yes, political headwinds remain - likely for a long time - but valuations offer far better downside protection if the market pulls back. And if AI eventually delivers real efficiency gains, Health Care is positioned to be one of the biggest beneficiaries.

We also hold a small position in health care and plan to add gradually when they go down further. It’s likely not bottoming yet, but tends to hold up better when the market turns. Health care is a permanent human need, it may not be true for AI. We believe in AI, just not in valuations when extrapolated too far.

On August 3, 2025, we flagged that META’s AI bet looked stretched — and today’s market concerns echo exactly what we wrote then. Long Google / short Meta ended up being one of the year’s stronger pairs. Warren Buffett adding to Google only reinforces the thesis.

Meta’s Huge AI Gamble

We’re closely watching META 1.21%↑ as a potential long-term short candidate or short pair. The company is making a massive AI bet that feels stretched relative to its business model.

Hyperscalers like Microsoft, Amazon, and Google can resell their cloud infrastructure, offsetting CapEx with customer revenue. Meta, on the other hand, is spending at a similar scale largely for its own use—leaving it with far greater CapEx risk unless it quickly finds AI use cases that justify the investment.

The market has rewarded Meta’s AI narrative so far. But consider this: if Google is truly lagging in AI, why did it still grow its top line solidly without an AI-driven advertising boost? Meanwhile, Meta is juggling buybacks, a small dividend, aggressive compensation, expensive M&A, and massive Reality Labs losses. Any hit to cash flow—similar to 2022’s privacy clampdowns by Apple and Google—would leave the company exposed.

What All $1T+ Companies Have in Common

One shared trait across every publicly listed trillion-dollar company is a massive global consumer base:

• Microsoft: Windows and Office

• Nvidia: consumer GPU dominance

• Apple: iPhone, Mac, wearables

• Google: search and free services/products

• Amazon: retail and Prime

• Meta: Facebook/WhatsApp/Instagram

• Tesla: Model S/3/X/Y

A recently leaked document suggests OpenAI generates roughly $13B in revenue, with ~70% coming from consumers paying ~$20/month. Only 5% of its 800M active users subscribe. For OpenAI to fund a trillion-dollar capex roadmap, the math gets tough: either paying users must grow dramatically, or ARPU must reach ~$150/month — assuming no dramatic expansion in user base or conversion rate.

We’re not aware of any global consumer business charging over $100/month to hundreds of millions of people.

Investors understand this is still a liquidity-driven market. Rising prices don’t validate OpenAI’s more extreme claims; too many assumptions must line up simultaneously. For Nvidia’s current trajectory to persist for years, you’d have to assume:

• the entire Mag7 reinvests nearly all free cash flow into AI infrastructure every year for several years,

• Microsoft, Google, Amazon, and AMD all fail simultaneously at their in-house chip efforts, and

• Nvidia’s annual chip refresh cycles either become must-buy events every year, which race with its own

All possible — but highly unlikely to align perfectly. We believe we’ve entered a phase where simple “beat and raise” quarters won’t be enough.

The Fed Returns to Center Stage

Volatility picked up again after Chair Powell emphasized that further cuts are “not a foregone conclusion. Far from it.” Investors still buy dips because the direction of policy remains lower - only the timing is uncertain. We doubt sentiment turns deeply bearish during a cutting cycle unless employment collapses. And ironically, even weak job numbers could push the market to new highs if they force the Fed’s hand.

Our view: stay cautious. Don’t get overconfident about any single outcome. META and Tesla already showed cracks. This is a tricky stretch for markets, and volatility will likely stay elevated until the Fed is politically aligned with the White House’s “run it hot” approach. That may not become fully clear until after March if more governors step down or in May.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of November 17, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-11-17: AM $XPEV $HTHT $ARMK $ZK $BRC

2025-11-17: PM $TCOM $ACM $XP $HP

2025-11-18: AM $HD $PDD $MDT $BHP $BIDU

2025-11-18: PM $SQM $DLB $POWL $GBDC $SBLK

2025-11-19: AM $TJX $LOW $TGT $VIK $WSM

2025-11-19: PM $NVDA $PANW $ZTO $CPA $NJR

2025-11-20: AM $WMT $NTES $CPRT $AXIA $LI

2025-11-20: PM $INTU $ROST $VEEV $ESTC $GAP

2025-11-21: AM $BJ $MNSO

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Last week was the first time in a while that the market showed a hint of real anxiety. Not a crisis-level panic, but enough to create a 5–7% pullback and a steady two-to-three-week grind lower—something we didn’t even see when the S&P fell 2.7% on October 10 in a single day. Most investors remain positioned for a year-end rally, but for the first time, we’re hearing people ask: What if the rally already happened?

NY Fed President Williams added to the unease with comments suggesting the government shutdown could drag on, and that reserves are shifting from “abundant” to merely “ample.”

“Based on recent sustained repo market pressures and other growing signs of reserves moving from abundant to ample, I expect that it will not be long before we reach ample reserves,” Williams added.

The weakening labor market is also getting investors’ attention. We’ve shifted from “the worse the labor market gets, the more the Fed will cut” to “what if things actually roll over sharply, and the AI bubble cracks at the same time?” Investors know that when employment weakens, it rarely deteriorates by just 0.1% a month. Layoffs are becoming more visible. And if your portfolio is already up 30% this year, do you really need to chase the last 5–10% into year-end just to secure a bonus?

We did see buyers step in at the POC last week, and the 6700 support test held reasonably well. If reopening headlines get confirmed in the next day or so, the market could be back near all-time highs within a week or two. Investors are trimming speculative names, but they’re not abandoning mega-caps. Even Meta found buyers at the lower end of its support zone. We don’t expect a sharp V-shaped reversal there unless it can reclaim 660 with strong momentum. There’s a heavy supply in that area. A gap above would reset the picture, but a slow grind higher will be tough.

Tesla continues to find support at the AVWAP from Elon’s purchase, and investors are buying alongside him. With Robotaxi becoming more tangible, enthusiasm will likely build. Tesla has never been a traditional valuation story. We know people who now drive almost entirely on FSD. Version 13.2.9 has impressed nearly everyone; 14.1.4 has some bugs, but nothing that seems unfixable. It only gets better from here. We’ve also tested Robotaxi in the Bay Area. After logging 4,000 miles on FSD, even some of us who were skeptical are rethinking how soon full autonomy might arrive.

Stay tuned, everyone. Everything you’re seeing here should be available for you to use by the end of the year - hopefully. :)

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of November 10, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-11-10: AM $B $BGNE $VG $TSN $BEKE

2025-11-10: PM $CRWV $OXY $RKLB $ASTS $SBS

2025-11-11: AM $SE $AU $VOD $NBIS $KEP

2025-11-11: PM $ALC $OKLO $DOX $CAE $AGRO

2025-11-12: AM $NU $TDG $TME $JBS $CRCL

2025-11-12: PM $CSCO $MFC $FLUT $PAAS $TTEK

2025-11-13: AM $DIS $MUFG $BN $MFG $SMFG

2025-11-13: PM $AMAT $BAP $EC $STN $STUB

2025-11-14: AM $SONY $IX $SHG $CIB $SR

2025-11-14: PM $CSAN $QUBT

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Last week was an interesting one. The market gapped higher three days in a row, then cooled off slightly in the last two sessions, finishing the week modestly higher—less than 1%. We’ve now entered the most seasonally bullish stretch of the year. The China trade headlines weren’t particularly inspiring, but at least they didn’t worsen. Meanwhile, corporate buybacks are set to ramp up following the Mag7 earnings cycle.

At the index level, things still look solid, but under the surface, caution is creeping in. Some of the more speculative names—or the weaker links among the Mag7, like Meta—broke through major supports in just two trading days. Oracle, which carries about 5x leverage, is down more than 20% from its recent high. If Oracle gives back the entire 40% surge from that single breakout day, it could signal growing investor skepticism toward less concrete AI narratives. Its free cash flow has already turned negative for two straight quarters—and is getting worse. META and ORCL together have become a useful gauge of where investors’ AI enthusiasm stands.

Our long Google / short Meta positioning continues to play out well, now up over 50%.

shorting Meta and going long Google, which have both worked out well. With the S&P 500 around 6,500, the market feels like it’s at a crossroads. Some may prefer waiting for a pullback to buy, others might look to short into strength around 6,800, or even consider a six-month neutral straddle if premiums line up. Could the market post three straight years of 20% gains? Yes, but the probability is lower. Four years in a row would be even tougher—and that’s where contrarian bets start to look interesting. For now, there’s no need to swing big; we’ll adjust as the setup changes.

Mag7 largely delivered as expected. Let’s see how the market digests that this week.
Good luck, everyone.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of October 27, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-11-03: AM

2025-11-03: PM

2025-11-04: AM

2025-11-04: PM

2025-11-05: AM

2025-11-05: PM

2025-11-06: AM

2025-11-06: PM

2025-11-07: AM

2025-11-07: PM

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Why Stocks Keep Going Up

People often ask why stocks seem to only go up these days. Professionals offer all kinds of clever explanations to justify it. But in our view, if something requires constant justification, it’s probably not cheap — even if it’s not necessarily expensive either.

Our answer is much simpler: because the market is open.

We never had a real deal with China. Then we floated the idea of a truce — which, oddly enough, worked better than an actual deal. But a couple of weeks ago, part of the uncomfortable truth resurfaced, triggering a sharp reversal. Many crypto traders got wiped out, even though tariffs don’t apply to crypto.

Today, we still don’t have a deal — but somehow, we “have a deal.” If you’re confused, you’re not alone.

At this point, the ingredients for a melt-up are in place. Algorithms will likely try to gap everything higher, no matter what Big Tech reports this week. Wall Street only needs to pick a few positive lines about this quarter or next year’s outlook to light the fuse.

This market is tough to play on either side. For most non-professional investors, keeping positions small might be the best way to stay sane.

Meanwhile, our volunteer is revamping the AVWAP charts to make them cleaner and easier to digest. The new site is shaping up nicely — thanks again for your patience. Stay tuned.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of October 27, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-10-27: AM

2025-10-27: PM

2025-10-28: AM

2025-10-28: PM

2025-10-29: AM

2025-10-29: PM

2025-10-30: AM

2025-10-30: PM

2025-10-31: AM

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Another remarkable week in the market. The $VIX spiked to 28 intraday at one point — only to get smacked right back down to 20. Hard to believe we’re just 1% away from all-time highs after that kind of volatility. This market really is a fearless honey badger.

There was some short-term hedging activity, but overall investors kept bidding up longer-dated calls. Flows are shifting back into the Mag 7, while more speculative names took a hit — was down over 7% on Friday alone, while the broader market held up impressively well.

In the short term, investors seem willing to be cautious only to the extent that they want real earnings, not distant promises 4–5 years out. That’s a sensible shift. Most of the bulls we’ve heard from — whether on TV or in person — think we’re in a 1998-like phase, maybe two to three years away from the bubble finally popping.

Given the recent action, it still looks like every dip will be bought, and we might see another ramp into year-end. As for us, we’re keeping positions small and speculating selectively on the upside. Even if the market drops 5% in a day, it won’t make a dent.

Yes — being cautious might look like the new stupid. But with everything going parabolic, this isn’t the time to scale up risk. We’re in a casino-like financial market, long-term investment discussion is for another day. At this point, it only takes one tweet to send the market up 2%, even with no substance behind it.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of October 20, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-10-20: AM

2025-10-20: PM

2025-10-21: AM $PM

2025-10-21: PM

2025-10-22: AM

2025-10-22: PM

2025-10-23: AM

2025-10-23: PM

2025-10-24: AM

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After weeks of relentless gains, the long-awaited dip has finally arrived. Unsurprisingly, it’s tied to the ongoing tariff saga — the same negotiation that never really improved and is now resurfacing in an uglier way. Still, given the current liquidity backdrop and market sentiment, we don’t think this is enough to completely derail the recent relentless run just yet.

The timing, however, is tricky. Earnings season is coming with a very low bar, and Presidents Trump and Xi are expected to meet in roughly two weeks. This latest tariff-related tweet could easily be a negotiation tactic — both sides trying to gain leverage before the meeting. If the meeting remains on schedule (and doesn’t get canceled), the outcome will likely be either mildly positive or another “truce” where both sides declare victory and kick the can further down the road.

For traders: be careful shorting this market. Between the Fed’s rate cuts and the “TACO” additions (Tech, AI, Chips, and Options, Trump Always Chickens Out — the market’s current obsession), dip buyers are still likely to show up. That said, this isn’t the moment to go levered long either. As crypto traders learned on Friday, it only takes a one-minute candle to wipe out overleveraged positions. A “TACO Monday” wouldn’t be pretty for them.

Tariffs are a sensitive issue and could reintroduce uncertainty. At 5750, the market might shrug it off. At 6750? A 2% pullback seems like a fair risk premium for renewed uncertainty. We might not go much higher from here — but we might not drop much either.

Volatility should stay sticky for a while, which opens up opportunities with lower directional risk. If you’re looking to buy the dip, consider using OTM call spreads that cover earnings season, scaling in gradually. If the market dips further but your bullish thesis remains intact, you can add more OTM call spreads and later close out the short legs once the premium dries up.

As for us, we’re leaning cautious. Friday’s single-day candle erased 21 days of gains — that’s worth respecting. We don’t believe one tariff tweet will end the market’s reckless optimism, but the amount of leverage in the system likely amplified the selling. For now, we’ll stay patient and let volatility do some of the heavy lifting.

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500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of October 13, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-10-13: AM

2025-10-14: AM

2025-10-14: PM

2025-10-15: AM

2025-10-15: PM

2025-10-16: AM

2025-10-16: PM

2025-10-17: AM

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As usual, not much has changed. With the Fed still having room to cut and a president eager to squeeze shorts, it’s hard to see the market falling sharply unless something material shifts. Last week, we saw some trimming in the mega caps and rotation into this year’s laggards, such as healthcare.

For fundamental investors, we don’t recommend shorting this market—even though it looks expensive. Let it run (go). The time will come, but even a 10% pullback wouldn’t look dramatic in the current context. We did notice some interesting put activity. For example, someone sold a large batch of December QQQ 560 puts and bought the same number of October 31st QQQ 580 puts. It’s a creative way to position for a quick pullback while staying open to a year-end rally. If the market drops quickly, the October 580 puts should profit nicely and offer protection—you could then close that leg and keep the December short puts, among other adjustments if you’re in the Santa rally camp. If the market grinds higher, you still pocket a small credit of around 2% or $3 per contract. Either way, it’s a flexible setup—but don’t fight this market without a clear plan.

On a side note, our volunteer has been working hard on the website launch. He’s even building a mobile-friendly version, taking on more work than originally planned. We’re hoping to share an early test version with our supporters in early December—fingers crossed.

SPX Quarterly OpEx and JPM’s Collar

500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of October 06, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-10-06: AM

2025-10-06: PM

2025-10-07: AM

2025-10-08: PM

2025-10-09: AM

2025-10-09: PM

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S&P 500 Sector Breadth

Information Technology

Communication Services

Financials

Consumer Discretionary

Health Care

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Consumer Staples

Energy

Utilities

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We finally had a rare stretch of three consecutive down days—something we haven’t seen in a while. It felt like a big down week, but in reality the S&P only slipped 0.31%. Not much damage.

Seasonally, this period is usually among the weakest of the year, yet traders are still buying post-October OpEx calls. That says a lot about sentiment.

On our end, we’re just keeping it light—running some small wheel option strategies on /ES futures, but not deploying cash. Our guess is the market may repeat the same playbook as the last OpEx: push higher into the JPM collar roll, then accelerate once the roll is out of the way.

For now, boring is good. We’ll wait and let the setup play out.

SPX Quarterly OpEx and JPM’s Collar

500 Insider Activities

Growth Quality Dashboard (Rule of 40)

Earnings This Week

For the week of September 29, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-09-29: AM

2025-09-29: PM

2025-09-30: AM

2025-09-30: PM

2025-10-01: AM

To add this FREE shared calendar, visit https://bit.ly/3ANoPtZ and click the ➕ "+" sign in the lower right corner. For iPhone, iPad, or any CalDAV device, don’t forget to enable iOS sync via https://calendar.google.com/calendar/u/0/syncselect

S&P 500 Sector Breadth

Information Technology

Communication Services

Financials

Consumer Discretionary

Health Care

Industrials

Consumer Staples

Energy

Utilities

Real Estate

Materials