Melt-up mode

"So far, the current bull market looks like a normal one, with the potential to match the returns of some of the best bull markets since the mid-1960s (chart). We are still targeting 6500 on the S&P 500 stock price index by the end of this year and 10,000 by the end of the "Roaring 2020s" decade. It's a bit hard to believe, but the main risk at this time may be a stock market meltup, i.e., a speculative bubble. "

Source: Yardeni

 

Perfection?

That NDX 2020 analogy continues to look pretty much perfect...

Source: LSEG Workspace

 

Remains underweight

Equity positioning has risen significantly off the bottom but is still far below February levels and remains underweight (-0.27sd, 30th percentile).

Source: Deutsche Bank

 

The biggest buy

Nomura's McElligott on the volatility control crowd: "...the latest projection for VC projected buying in the case of an average 50bps SPX daily move over the next 1m = +$114.2B to BUY. This is the largest estimated 1m BUY projection in our model’s history since 2004".

Source: Nomura

 

Offside

SPX is once again trading above consensus strategists' forecasts... Do we see FOMO kick in here as well?

Source: Bloomberg/Authers

 

So much room to re-lever

US long-short hedge fund ratio is at the 10th percentile (3-year lookback)

Source: GS Prime

 

The vol crash

VIX and MOVE reaching "natural" floor levels again. Do not forget that volatility is mean reverting. Using volatility for directional plays makes a lot of sense here.

Source: LSEG Workspace

 

Puke puts

Put call ratio is at rather low levels. Chart shows put/call volume 5 day moving average ratio.

Source: DB

 

Inverse fear

SPX skew in full crash mode as downside is out of fashion.

Source: CBOE

 

but consider some hedges before going all in...

The VIX guy

Our favourite contrarian indicator when it comes to volatility just dialled in, explaining we are in the middle of a volatility paradigm shift, outlining the arguments for a low volatility market going forward. The VIX guy is back, and it time to start thinking about those long volatility trades again.

Source: Equity Clock