Something insane is happening in the markets right now. The put-to-call ratio’s 30-day moving average just collapsed to its lowest level since November 2021—right before the 2022 bear market kicked off. Even crazier? This lines up with February 2020, right before the COVID crash. Yet here we are, with hedging basically non-existent.
Meanwhile, global central banks are slashing rates at a speed not seen since the 2020 crisis. What does that tell you? They’re scared. Something is breaking behind the scenes, and they’re throwing everything they’ve got at the problem. But the market? It doesn’t care. The S&P 500 has skyrocketed 60% in just two years. Historically, three out of the last four times this happened, massive crashes followed. The one exception? A true melt-up. So which one is it going to be this time?
And then there’s Mark Zuckerberg. The man just dumped over half a billion dollars in Meta stock during its historic 20-day winning streak. That’s not a retail trader taking profits—that’s the founder of the company cashing out in size. Makes you wonder what he sees coming.
If you think credit spreads won’t explode at some point, you’re living in fantasy land. Small-caps are getting crushed because of default fears, yet investors keep chasing mega-cap tech like nothing’s wrong.
And then there’s housing—an absolute disaster. Pending home sales have collapsed back to 1995 levels. Existing home sales in 2024 hit a 30-year low, while the median home price shot to a record $407,500. Mortgage rates are stuck near 7%, and homebuyers are tapped out. Even Citigroup’s Alice Zheng admits there’s no near-term upside for housing demand.
So let’s recap: No one is hedging, central banks are panicking, stocks are flying, credit is on the edge, and housing is imploding. We’ve seen this movie before. The only question is, do we get a melt-up or the reckoning?
Sources:
https://globalmarketsinvestor.beehiiv.com/p/global-central-banks-are-cutting
https://x.com/bravosresearch/status/1891174402554802495
https://x.com/Barchart/status/1891026501404926344
https://www.wsj.com/economy/housing/home-sales-on-track-for-worst-year-since-1995-9a2029ae