Good morning, everyone, from the inky black of Palo Alto’s pre-dawn. I’m relieved to see so much green on the screen, not that I’m long anything (except for Rivian) but because I’m so light. I was rather troubled last night when I saw the market plunging again and figured I’d be kicking myself for selling off 70% of my DIA puts already, just as one example.
I will say, though, that looking at the volatility chart for 2026, it seems we’re in an environment of higher highs and higher lows, not the end of the dynamism.
The /NQ is up about half a percent (although “triple digits” is also accurate and sounds more exciting). That red line of resistance is key.
The /RTY has a different line to grapple with, which goes back for eleven months instead of just a few days. That is to say, this is the Liberation Day trendline, and it is having magnetic power of prices.
One of the most substantial patterns happening right now is the trading range of the S&P 500 futures, which has been going on for months. For the first time, we sneaked a little below this level yesterday morning, but that weakness was quickly bought.
Thus, this tremendous top is still in place, but I’ve to say, the odds to me of a much more serious breakdown are looking better than they have in a very long time.
As always, even if you don’t care a single Solano about crypto, keep an eye on Bitcoin. Strength and weakness here is an important harbinger of risk on/off psychology. These days, I look at BTC even before equity futures.
I am coming into the day 88% committed. The giant gorilla in the room is the Iran War (or, sorry, the “kinetic operations“) and what’s going to happen next, which even Yoda doesn’t know.
