The House of Cards is Ready to Collapse

Bearish Divergences

The Put/Call ratio, which measures the ratio of bearish versus bullish options bets on the stock market, has fallen to record 2-year lows repeatedly over the past several months. This reflects the fact that speculative activity is the highest it has ever been over this period as the SPY (orange line) has climbed to new record highs:

Illusions of a Strong Stock Market and Economy

The narrative of a strong stock market rests upon a handful of the largest companies. The largest 10 constituents of the S&P 500 by market cap now make up over 29% of the index. What’s less known is that the largest 10 companies in the NASDAQ 100 make up over 50% of the QQQ’s holdings.

The Fed’s Impact

Monetary policy has grabbed everyone’s attention since chairman Powell announced the adoption of “average inflation targeting.” The yield curve has steepened, money is flowing back into gold after several weeks of consolidation, and now everyone is discussing the prospects of big inflation down the road.



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Dohmen Capital

Dohmen Capital


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