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EndGame Macro
Consumer Sentiment Is Falling for a Reason, Because The Stock Market Isn’t the Real Economy
If you zoom in on this chart and then layer it over what’s happening underneath the surface of the economy, it becomes obvious why people are this discouraged. Sentiment is falling because the lived reality of the average household has gotten heavier in ways that don’t show up cleanly in GDP or stock market levels.
Consumer sentiment is now brushing up against record lows, and views of personal finances have slipped to their weakest point in sixteen years. That’s the accumulated strain of prices that reset higher and never came back down, borrowing costs that climbed and stayed high, and a job market that feels a little less secure each month. When someone’s car insurance, rent, groceries, medical bills, and credit card interest all cost more at the same time, you don’t need an economist to tell you why confidence is sliding. People feel it in their checking accounts long before the data confirms it.
The Strain Is Now Showing Up in Hard Numbers, Not Just Feelings
This isn’t just sentiment drifting around in a vacuum. The delinquency data paints the same story. Credit card delinquency rates are now higher than they were at the peak of the Great Financial Crisis, that’s a stunning thing to be able to say with a straight face. Student loan delinquencies have surged since payments resumed, with about 10% of borrowers 90 days past due. Auto loan delinquencies are at their highest point since 2010. And in the commercial world, office vacancies are sitting at roughly 14.1%, more than six times the 2019 rate and far worse than what we saw heading into 2008. When this many corners of the credit universe start flashing yellow or red, households don’t need a sentiment survey to tell them something is off…they can sense it.
The kicker is that these pressures stack. A household that’s worried about its job prospects, and the University of Michigan data shows rising job loss fears across age groups, is often the same one juggling rising credit card balances, a car loan that costs more than it used to, and higher prices across everything essential. When those pieces move together, confidence slips because they’re paying attention.
A Split Between the Macro Story and the Everyday Story
What makes this moment tricky is that the headline economy still looks okay. GDP isn’t contracting, and the stock market keeps floating higher. But that disconnect is exactly why sentiment looks the way it does. Households see an economy that appears strong on paper while their personal experience is deteriorating. And when the gap between the official story and the lived story gets too wide, people stop believing the headlines and start trusting their own financial stress signals.
That’s what this chart captures. A population that’s not panicking but is quietly acknowledging that the math doesn’t work like it used to. A population that sees the bills rising faster than the paychecks. A population that knows something is tightening even if policymakers don’t want to say it out loud yet.
My Honest Read
This is late cycle behavior. It’s the kind of sentiment you get when households aren’t in freefall but are stretched thin and losing resilience. The fact that so many delinquency metrics are now worse than they were heading into the financial crisis is a signal that the average American balance sheet is more fragile than the macro narrative implies. And fragility has a way of surfacing all at once.
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Consumer Sentiment Is Falling for a Reason, Because The Stock Market Isn’t the Real Economy
If you zoom in on this chart and then layer it over what’s happening underneath the surface of the economy, it becomes obvious why people are this discouraged. Sentiment is falling because the lived reality of the average household has gotten heavier in ways that don’t show up cleanly in GDP or stock market levels.
Consumer sentiment is now brushing up against record lows, and views of personal finances have slipped to their weakest point in sixteen years. That’s the accumulated strain of prices that reset higher and never came back down, borrowing costs that climbed and stayed high, and a job market that feels a little less secure each month. When someone’s car insurance, rent, groceries, medical bills, and credit card interest all cost more at the same time, you don’t need an economist to tell you why confidence is sliding. People feel it in their checking accounts long before the data confirms it.
The Strain Is Now Showing Up in Hard Numbers, Not Just Feelings
This isn’t just sentiment drifting around in a vacuum. The delinquency data paints the same story. Credit card delinquency rates are now higher than they were at the peak of the Great Financial Crisis, that’s a stunning thing to be able to say with a straight face. Student loan delinquencies have surged since payments resumed, with about 10% of borrowers 90 days past due. Auto loan delinquencies are at their highest point since 2010. And in the commercial world, office vacancies are sitting at roughly 14.1%, more than six times the 2019 rate and far worse than what we saw heading into 2008. When this many corners of the credit universe start flashing yellow or red, households don’t need a sentiment survey to tell them something is off…they can sense it.
The kicker is that these pressures stack. A household that’s worried about its job prospects, and the University of Michigan data shows rising job loss fears across age groups, is often the same one juggling rising credit card balances, a car loan that costs more than it used to, and higher prices across everything essential. When those pieces move together, confidence slips because they’re paying attention.
A Split Between the Macro Story and the Everyday Story
What makes this moment tricky is that the headline economy still looks okay. GDP isn’t contracting, and the stock market keeps floating higher. But that disconnect is exactly why sentiment looks the way it does. Households see an economy that appears strong on paper while their personal experience is deteriorating. And when the gap between the official story and the lived story gets too wide, people stop believing the headlines and start trusting their own financial stress signals.
That’s what this chart captures. A population that’s not panicking but is quietly acknowledging that the math doesn’t work like it used to. A population that sees the bills rising faster than the paychecks. A population that knows something is tightening even if policymakers don’t want to say it out loud yet.
My Honest Read
This is late cycle behavior. It’s the kind of sentiment you get when households aren’t in freefall but are stretched thin and losing resilience. The fact that so many delinquency metrics are now worse than they were heading into the financial crisis is a signal that the average American balance sheet is more fragile than the macro narrative implies. And fragility has a way of surfacing all at once.
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EndGame Macro
The Vision Is Big, but Stablecoins Just Aren’t There Yet.
Stablecoins are still moving with the crypto tide, not breaking away into their own independent financial system. The market cap climbed steadily through 2024 and into mid 2025, then hit a ceiling and started to bend lower right alongside Bitcoin. That drop on the right side of the chart, about $303B outstanding and almost $2B gone in a week is the tell. If stablecoins were becoming the next big dollar funding layer, you wouldn’t see them shrink the minute risk comes off. You’d see inflows as people moved out of volatile assets and parked in digital dollars. Instead, you’re seeing people step out of the whole ecosystem.
The growth rate since the GENIUS Act is also part of the story. Roughly $10B a month isn’t trivial, but from a $300B base it’s not the kind of acceleration you’d expect if stablecoins were on track to become a $3T pillar of global liquidity anytime soon. At that pace, the math stretches out over decades. That gap between the hype and the slope of the actual line is important: it tells you stablecoins are still mostly serving traders, exchanges, arbitrage desks, and yield farmers, not yet the broader dollar plumbing that some analysts imagine.
A big part of that is structural. Money market funds are yielding real returns. Banks still dominate payments. Regulation is uneven. And most of the stablecoin market is concentrated in a single opaque issuer that big institutions can’t fully trust. So for now, stablecoins expand when crypto is hot and contract when crypto cools, which is exactly what the chart is capturing. It’s not that the idea lacks potential; it’s that the real world isn’t adopting it at the speed the narratives suggest.
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The Vision Is Big, but Stablecoins Just Aren’t There Yet.
Stablecoins are still moving with the crypto tide, not breaking away into their own independent financial system. The market cap climbed steadily through 2024 and into mid 2025, then hit a ceiling and started to bend lower right alongside Bitcoin. That drop on the right side of the chart, about $303B outstanding and almost $2B gone in a week is the tell. If stablecoins were becoming the next big dollar funding layer, you wouldn’t see them shrink the minute risk comes off. You’d see inflows as people moved out of volatile assets and parked in digital dollars. Instead, you’re seeing people step out of the whole ecosystem.
The growth rate since the GENIUS Act is also part of the story. Roughly $10B a month isn’t trivial, but from a $300B base it’s not the kind of acceleration you’d expect if stablecoins were on track to become a $3T pillar of global liquidity anytime soon. At that pace, the math stretches out over decades. That gap between the hype and the slope of the actual line is important: it tells you stablecoins are still mostly serving traders, exchanges, arbitrage desks, and yield farmers, not yet the broader dollar plumbing that some analysts imagine.
A big part of that is structural. Money market funds are yielding real returns. Banks still dominate payments. Regulation is uneven. And most of the stablecoin market is concentrated in a single opaque issuer that big institutions can’t fully trust. So for now, stablecoins expand when crypto is hot and contract when crypto cools, which is exactly what the chart is capturing. It’s not that the idea lacks potential; it’s that the real world isn’t adopting it at the speed the narratives suggest.
Total stablecoin market cap has begun falling with BTC (far right on chart below.)
Stablecoins have only grown $10B per month since the passage of the GENIUS Act. At this pace, it will take 23 years for stablecoin market cap to hit Bessent's $3T stablecoin market cap goal.🤔 https://t.co/nar9NbxPjq tweet
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Quiver Quantitative
BREAKING: The House Ethics Committee is investigating Representative Mike Collins.
Unclear what the investigation is for.
Worth noting that Collins is the most active crypto trader in Congress. https://t.co/zMevmu46Ij
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BREAKING: The House Ethics Committee is investigating Representative Mike Collins.
Unclear what the investigation is for.
Worth noting that Collins is the most active crypto trader in Congress. https://t.co/zMevmu46Ij
tweet
WealthyReadings
RT @ruth_capital: one thing that baffles me a lot is how horrible and bifurcating some of these accounts become once you're in a clear down-trend/retracement
no capital protection/bias swap whatsoever once bridge starts collapsing and spamming daily AI-points fails
be selective whom you follow
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RT @ruth_capital: one thing that baffles me a lot is how horrible and bifurcating some of these accounts become once you're in a clear down-trend/retracement
no capital protection/bias swap whatsoever once bridge starts collapsing and spamming daily AI-points fails
be selective whom you follow
tweet
EndGame Macro
When Geopolitics Tighten, Even Cutting Edge Chips Become Trade Currency.
You’ve got a White House that treats everything as a transaction. H200s into China aren’t just exports, they’re a bargaining chip. Floating the idea right now signals to Beijing that this is something you want, and we can take it away or give it back depending on what we get on trade, ag, or broader geopolitical concessions. You can’t play that card if it’s never on the table, so the leak itself is part of the negotiation.
On top of that, Nvidia has just printed an absurd quarter…$57B in revenue, $51B from data center, 73%+ margins, and guidance to $65B next quarter. They’re not limping; they’re a core pillar of the stock market. Letting them tap China again under strict export controls gives the administration an easy win with more U.S. corporate profits, higher tax receipts, and a happy equity market, without writing a stimulus check. And because there’s already precedent with the H20 deal where the U.S. Treasury took a 15% skim, you can easily imagine them reviving that model “We’ll let you sell, but we take a cut.” It turns national security policy into a revenue sharing agreement.
There’s also a quiet risk management angle. Nvidia’s balance sheet shows inventories nearly doubling this year to just under $20B. They’re ramping supply hard on the assumption that AI demand stays vertical. If that curve bends, you don’t want a strategic U.S. champion stuck with shelves of high end chips and another multi billion write down tied to export rules. Opening a tightly controlled Chinese outlet for last season’s H200s gives Nvidia an extra release valve for that capacity and lowers the odds that Washington’s own restrictions blow back into a big market scare later.
The Deeper Strategic Logic
Finally, there’s the tech race logic some people inside the administration clearly buy…H200 is powerful, but the real bleeding edge is already shifting to Blackwell and then Rubin. Selling H200s under performance caps and quotas can be framed as keeping Chinese labs dependent on U.S. hardware that’s one step behind, while U.S. and allied players move on to the next node. That’s how they reconcile that they’re tough on China with we’re going to let Nvidia book billions.
So when you put it all together, the timing isn’t random. They’re staring at a hugely profitable but inventory heavy U.S. champion, a slowing global backdrop, a need for bargaining chips with Beijing, and an election narrative built on deals and markets. In that mix, floating controlled H200 sales to China becomes less about softening on national security and more about creating optionality…a card they can trade, tax, or pull back depending on how the rest of the game unfolds.
tweet
When Geopolitics Tighten, Even Cutting Edge Chips Become Trade Currency.
You’ve got a White House that treats everything as a transaction. H200s into China aren’t just exports, they’re a bargaining chip. Floating the idea right now signals to Beijing that this is something you want, and we can take it away or give it back depending on what we get on trade, ag, or broader geopolitical concessions. You can’t play that card if it’s never on the table, so the leak itself is part of the negotiation.
On top of that, Nvidia has just printed an absurd quarter…$57B in revenue, $51B from data center, 73%+ margins, and guidance to $65B next quarter. They’re not limping; they’re a core pillar of the stock market. Letting them tap China again under strict export controls gives the administration an easy win with more U.S. corporate profits, higher tax receipts, and a happy equity market, without writing a stimulus check. And because there’s already precedent with the H20 deal where the U.S. Treasury took a 15% skim, you can easily imagine them reviving that model “We’ll let you sell, but we take a cut.” It turns national security policy into a revenue sharing agreement.
There’s also a quiet risk management angle. Nvidia’s balance sheet shows inventories nearly doubling this year to just under $20B. They’re ramping supply hard on the assumption that AI demand stays vertical. If that curve bends, you don’t want a strategic U.S. champion stuck with shelves of high end chips and another multi billion write down tied to export rules. Opening a tightly controlled Chinese outlet for last season’s H200s gives Nvidia an extra release valve for that capacity and lowers the odds that Washington’s own restrictions blow back into a big market scare later.
The Deeper Strategic Logic
Finally, there’s the tech race logic some people inside the administration clearly buy…H200 is powerful, but the real bleeding edge is already shifting to Blackwell and then Rubin. Selling H200s under performance caps and quotas can be framed as keeping Chinese labs dependent on U.S. hardware that’s one step behind, while U.S. and allied players move on to the next node. That’s how they reconcile that they’re tough on China with we’re going to let Nvidia book billions.
So when you put it all together, the timing isn’t random. They’re staring at a hugely profitable but inventory heavy U.S. champion, a slowing global backdrop, a need for bargaining chips with Beijing, and an election narrative built on deals and markets. In that mix, floating controlled H200 sales to China becomes less about softening on national security and more about creating optionality…a card they can trade, tax, or pull back depending on how the rest of the game unfolds.
US officials are having early discussions on whether to let Nvidia sell its H200 artificial intelligence chips to China, a contentious potential move that would mark a major win for the world’s most valuable company https://t.co/j30skXGqT4 tweet
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Bloomberg (@business) on X
US officials are having early discussions on whether to let Nvidia sell its H200 artificial intelligence chips to China, a contentious potential move that would mark a major win for the world’s most valuable company https://t.co/j30skXGqT4
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EndGame Macro
Want Good Schools? Look at the Town’s Budget, Not Just the Ranking
If you’re planning to buy a home in the next few years, this is one of those moments where you really need to pay attention to the town, not just the house. We’re heading into a period where budgets are tightening, federal support is fading, and costs are rising for schools, infrastructure, and municipal services. That’s when you find out which communities are actually well run and which ones have been papering over problems during the good years. The last thing you want is to move somewhere that suddenly has to cut school programs, lay off teachers, or hike taxes because the math stopped working.
When I look at towns, school quality is obviously a starting point…everyone wants good schools. But the part I focus on the most is the tax base behind those schools. The towns that hold up in rougher cycles usually have a solid mix of commercial revenue, especially from businesses that aren’t the first to disappear in a downturn. Healthcare, medical campuses, logistics, universities, government, long established professional firms, those anchors keep money coming in even when the economy softens. And that stability is what protects school budgets, local services, and long term property values.
So if you’re trying to set up your future, think the way you would about any investment…look past the surface and look at the fundamentals. The next few years will tell you a lot about which towns have their act together. And that’s the environment you want to build a life in.
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Want Good Schools? Look at the Town’s Budget, Not Just the Ranking
If you’re planning to buy a home in the next few years, this is one of those moments where you really need to pay attention to the town, not just the house. We’re heading into a period where budgets are tightening, federal support is fading, and costs are rising for schools, infrastructure, and municipal services. That’s when you find out which communities are actually well run and which ones have been papering over problems during the good years. The last thing you want is to move somewhere that suddenly has to cut school programs, lay off teachers, or hike taxes because the math stopped working.
When I look at towns, school quality is obviously a starting point…everyone wants good schools. But the part I focus on the most is the tax base behind those schools. The towns that hold up in rougher cycles usually have a solid mix of commercial revenue, especially from businesses that aren’t the first to disappear in a downturn. Healthcare, medical campuses, logistics, universities, government, long established professional firms, those anchors keep money coming in even when the economy softens. And that stability is what protects school budgets, local services, and long term property values.
So if you’re trying to set up your future, think the way you would about any investment…look past the surface and look at the fundamentals. The next few years will tell you a lot about which towns have their act together. And that’s the environment you want to build a life in.
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Offshore
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Dimitry Nakhla | Babylon Capital®
Oracle is now down ~40% from its September peak, with the multiple contracting from 46x to a more reasonable 28x
At long last, The Intelligent Investor has re-entered the chat 😂
$ORCL https://t.co/i9aXglG17p
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Oracle is now down ~40% from its September peak, with the multiple contracting from 46x to a more reasonable 28x
At long last, The Intelligent Investor has re-entered the chat 😂
$ORCL https://t.co/i9aXglG17p
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Offshore
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EndGame Macro
The GDPNow Spike Looks Great Until You Ask What It’s Actually Measuring
This chart is basically a race between two ways of estimating the same quarter. The green line is the Atlanta Fed’s GDPNow model, a fully mechanical tracker that updates whenever new economic data drops. The blue line is the Blue Chip economist consensus, what human forecasters think GDP will look like once the quarter is over.
Early in the summer, both sides were sitting around 1–2% growth. But as the data came in like retail sales, manufacturing reports, income and outlays, housing…the GDPNow model kept nudging higher, climbing toward a little over 4% by mid November. The consensus moved too, but more slowly and never caught up. So at face value, the chart is saying the data flow for Q3 has looked surprisingly strong, at least as GDP is officially measured. The model just reacts faster than human forecasters.
But Here’s the Important Part And What GDPNow Can’t See
GDPNow only tells you how the BEA’s GDP formula will likely shake out and not how healthy the economy actually feels on the ground. And when you read the underlying methodology, the limitations jump out.
It’s A Mod Of The BEA Spreadsheet , Not A Model Of Real Life
GDPNow’s own slides are explicit…”no judgmental adjustments,” “solely the mathematical results of the model.”
That means it treats every monthly number literally. If inventories rise because goods aren’t selling, GDPNow shows an increase…even though, economically, that’s not strength. If imports collapse because consumers are tightening up, GDPNow shows a positive contribution from net exports…even though that’s a sign of softer domestic demand. The model only knows the arithmetic. It has no intuition.
It Can’t Distinguish Quality Of Growth
Look at the decomposition table in the GDPNow slides…by the time the estimate hits 4.2%, a big chunk of the lift is coming from things like net exports and inventories. Those categories can move GDP without telling you anything good about the underlying economy.
A strong GDP number driven by trade timing and stockpiling is very different from a strong GDP number driven by wage funded consumption. GDPNow doesn’t care, it all counts the same.
It Assumes Old Relationships Still Hold In A New Economy
GDPNow uses “bridge equations” basically historical correlations to map monthly data into quarterly GDP components. That’s fine when the structure of the economy is stable. But right now?
•Pandemic distortions
•Credit card reliance
•Rising delinquencies
•Housing affordability stress
•Fiscal cliffs
•Higher interest rate sensitivity
Those are regime changes, not noise. A model trained on the 2010–2019 world may not capture 2025 accurately. It’s blind to distribution, fragility, and financial stress
GDPNow doesn’t see…
•who is doing the spending,
•how much of it is funded by debt,
•whether households are underwater,
•or whether businesses are quietly pulling back.
You can have 4% real GDP growth with rising bankruptcies, falling real wages for most households, and stress building in CRE, autos, and credit cards. None of that touches the GDPNow estimate until it finally shows up as weaker PCE months later.
And by then, the story has already changed.
The Bottom Line
GDPNow is a fast, transparent way of guessing what the BEA will publish. And on that front, it’s often pretty good. But the model is not a reliable read on the real underlying health of the economy. It’s a mechanical mirror of the official accounting framework and that framework often flatters the headline while hiding the fractures underneath.
So when you see the green line sprinting ahead of the consensus, don’t jump straight into thinking the economy is booming. The model is telling you how the math looks, not how people are living. And right now, that gap between the math and the lived reality is wider than the lines on this chart let on. tweet
The GDPNow Spike Looks Great Until You Ask What It’s Actually Measuring
This chart is basically a race between two ways of estimating the same quarter. The green line is the Atlanta Fed’s GDPNow model, a fully mechanical tracker that updates whenever new economic data drops. The blue line is the Blue Chip economist consensus, what human forecasters think GDP will look like once the quarter is over.
Early in the summer, both sides were sitting around 1–2% growth. But as the data came in like retail sales, manufacturing reports, income and outlays, housing…the GDPNow model kept nudging higher, climbing toward a little over 4% by mid November. The consensus moved too, but more slowly and never caught up. So at face value, the chart is saying the data flow for Q3 has looked surprisingly strong, at least as GDP is officially measured. The model just reacts faster than human forecasters.
But Here’s the Important Part And What GDPNow Can’t See
GDPNow only tells you how the BEA’s GDP formula will likely shake out and not how healthy the economy actually feels on the ground. And when you read the underlying methodology, the limitations jump out.
It’s A Mod Of The BEA Spreadsheet , Not A Model Of Real Life
GDPNow’s own slides are explicit…”no judgmental adjustments,” “solely the mathematical results of the model.”
That means it treats every monthly number literally. If inventories rise because goods aren’t selling, GDPNow shows an increase…even though, economically, that’s not strength. If imports collapse because consumers are tightening up, GDPNow shows a positive contribution from net exports…even though that’s a sign of softer domestic demand. The model only knows the arithmetic. It has no intuition.
It Can’t Distinguish Quality Of Growth
Look at the decomposition table in the GDPNow slides…by the time the estimate hits 4.2%, a big chunk of the lift is coming from things like net exports and inventories. Those categories can move GDP without telling you anything good about the underlying economy.
A strong GDP number driven by trade timing and stockpiling is very different from a strong GDP number driven by wage funded consumption. GDPNow doesn’t care, it all counts the same.
It Assumes Old Relationships Still Hold In A New Economy
GDPNow uses “bridge equations” basically historical correlations to map monthly data into quarterly GDP components. That’s fine when the structure of the economy is stable. But right now?
•Pandemic distortions
•Credit card reliance
•Rising delinquencies
•Housing affordability stress
•Fiscal cliffs
•Higher interest rate sensitivity
Those are regime changes, not noise. A model trained on the 2010–2019 world may not capture 2025 accurately. It’s blind to distribution, fragility, and financial stress
GDPNow doesn’t see…
•who is doing the spending,
•how much of it is funded by debt,
•whether households are underwater,
•or whether businesses are quietly pulling back.
You can have 4% real GDP growth with rising bankruptcies, falling real wages for most households, and stress building in CRE, autos, and credit cards. None of that touches the GDPNow estimate until it finally shows up as weaker PCE months later.
And by then, the story has already changed.
The Bottom Line
GDPNow is a fast, transparent way of guessing what the BEA will publish. And on that front, it’s often pretty good. But the model is not a reliable read on the real underlying health of the economy. It’s a mechanical mirror of the official accounting framework and that framework often flatters the headline while hiding the fractures underneath.
So when you see the green line sprinting ahead of the consensus, don’t jump straight into thinking the economy is booming. The model is telling you how the math looks, not how people are living. And right now, that gap between the math and the lived reality is wider than the lines on this chart let on. tweet
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EndGame Macro
Peak Hedging, Peak Fear And The Setup For A Reflexive Rally
This chart is basically showing that the options market just hit one of those moments where fear stops being a vibe and becomes something you can literally measure. SPY put volume didn’t just pick up, it exploded. It’s the second highest reading ever, right alongside the handful of days where traders collectively hit the panic button and loaded up on protection. If you look back at those dates…September 2022, March 2023, the cluster in early April 2025 they all happened during sharp pullbacks where sentiment was washed out and people were hedging aggressively.
The table at the bottom is the punchline…every time put volume crossed 8 million contracts, SPY was higher a month later. Not immediately, not always cleanly, but the one month window has been remarkably consistent. And that’s why these spikes show up near bottoms. It’s positioning. When everyone crowds into puts at the same time, the market often runs out of sellers. Dealers start buying back into strength, hedges decay, shorts get pinned, and that fear flips into a reflexive move the other way.
Why It’s Not A Perfect Bottom Signal But Still Matters
You can’t take any of this as gospel. The sample size is tiny, and the options market today looks nothing like it did a decade ago. Zero day options, systematic hedging flows, dealer gamma dynamics, all of that means an 8M+ put spike today is built on an entirely different ecosystem than the original data points. And huge put volume isn’t always raw fear; sometimes it’s a hedge roll, sometimes it’s a big player setting up for an event, and sometimes it’s just structured product desks doing their thing. The chart treats it all the same.
But the bigger message still holds that traders are scared, hedged, and leaning in one direction. When positioning gets this lopsided, you don’t need some miraculous macro catalyst to spark a bounce, you just need the bleeding to slow. In markets, extreme fear tends to create its own reversal.
So What’s the Highest Probability Outcome Now?
This is where everything comes together. A spike in put volume like this almost always marks a point where the market is emotionally exhausted. That doesn’t mean the exact bottom is in but in the short term, the odds tilt toward a reflexive bounce, not a continuation of the slide. When everyone is looking down, markets usually move up simply because the risk has already been priced in.
And that’s my highest probability view here…the next meaningful move is more likely to be upward. Maybe sharp, maybe fast, maybe messy but upward. After that, the market probably runs into the reality of a late cycle economy, stretched consumers, and a Fed that still doesn’t have a clean exit. So the bounce may not become a new trend, but the setup for relief is better than the setup for a fresh collapse.
This isn’t call the bottom energy. It’s recognizing the difference between a market that’s still panicking and one that’s already burned through most of its fear. Right now, we’re firmly in the second camp.
tweet
Peak Hedging, Peak Fear And The Setup For A Reflexive Rally
This chart is basically showing that the options market just hit one of those moments where fear stops being a vibe and becomes something you can literally measure. SPY put volume didn’t just pick up, it exploded. It’s the second highest reading ever, right alongside the handful of days where traders collectively hit the panic button and loaded up on protection. If you look back at those dates…September 2022, March 2023, the cluster in early April 2025 they all happened during sharp pullbacks where sentiment was washed out and people were hedging aggressively.
The table at the bottom is the punchline…every time put volume crossed 8 million contracts, SPY was higher a month later. Not immediately, not always cleanly, but the one month window has been remarkably consistent. And that’s why these spikes show up near bottoms. It’s positioning. When everyone crowds into puts at the same time, the market often runs out of sellers. Dealers start buying back into strength, hedges decay, shorts get pinned, and that fear flips into a reflexive move the other way.
Why It’s Not A Perfect Bottom Signal But Still Matters
You can’t take any of this as gospel. The sample size is tiny, and the options market today looks nothing like it did a decade ago. Zero day options, systematic hedging flows, dealer gamma dynamics, all of that means an 8M+ put spike today is built on an entirely different ecosystem than the original data points. And huge put volume isn’t always raw fear; sometimes it’s a hedge roll, sometimes it’s a big player setting up for an event, and sometimes it’s just structured product desks doing their thing. The chart treats it all the same.
But the bigger message still holds that traders are scared, hedged, and leaning in one direction. When positioning gets this lopsided, you don’t need some miraculous macro catalyst to spark a bounce, you just need the bleeding to slow. In markets, extreme fear tends to create its own reversal.
So What’s the Highest Probability Outcome Now?
This is where everything comes together. A spike in put volume like this almost always marks a point where the market is emotionally exhausted. That doesn’t mean the exact bottom is in but in the short term, the odds tilt toward a reflexive bounce, not a continuation of the slide. When everyone is looking down, markets usually move up simply because the risk has already been priced in.
And that’s my highest probability view here…the next meaningful move is more likely to be upward. Maybe sharp, maybe fast, maybe messy but upward. After that, the market probably runs into the reality of a late cycle economy, stretched consumers, and a Fed that still doesn’t have a clean exit. So the bounce may not become a new trend, but the setup for relief is better than the setup for a fresh collapse.
This isn’t call the bottom energy. It’s recognizing the difference between a market that’s still panicking and one that’s already burned through most of its fear. Right now, we’re firmly in the second camp.
S&P 500 $SPY Put Volume on Thursday was the 2nd largest ever 🚨 Historically this has usually occurred near bottoms 🥳🤑🫂 https://t.co/3543mXn5ii tweet