When Everyone Buys Puts…
Peak AI fear?
Hard to disagree with Morgan Stanley's Kunal Sodha.
*FED'S WALLER SAYS CITRINI REPORT ON AI OVERSTATES RISK TO JOBS
When you have Fed board members commenting on a viral Substack post, it makes me ponder – are we close to a local peak in the fear of AI disruption?
Massive in NDX
Massive support sits just below in the NDX: range lows, the major trend line, and the 200-day moving average all cluster slightly lower. The NASDAQ has essentially gone nowhere since September. And you rarely want to short a dull, directionless market…
Source: LSEG Workspace
Massively stressed
Even though the NDX has barely moved in recent weeks, the VXN has surged sharply higher. When fear gets crowded, it often sets the stage for a squeeze higher.
Source: LSEG Workspace
Tech put love
The longer term view: People are back loving tech puts in size. More here.
Source: Sentimentrader
Last time...
...NDX volatility was this well bid, markets decided to squeeze higher.
Source: LSEG Workspace
Starting to decelerate
GS: "We expect the hyperscaler capex growth rate will begin to decelerate later in 2026. The scenarios would imply capex growth equal to roughly 70-75% year/year. For the full year, that would imply a growth rate similar to 2025, but would imply a deceleration in the quarterly growth rate in the second half of 2026."
Source: Goldman
Trough catalyst
GS: "Decelerating capex growth would give investors line of sight to a potential trough in free cash flows. We believe a recovery in free cash flows would allow investors to start to value the hyperscalers on an earnings basis again."
The hyperscalers trade at 24x forward EPS, ranking in the 14th percentile versus the past 10 years. More here.
Source: Goldman
Massive hammer
BTC weekly chart is printing a large hammer right at long-term trend support. The 200-week MA sits slightly below, and we nearly tested it earlier this month. All charts here.
Source: LSEG Workspace
The tech connection
BTC vs NDX gap still wide... room to mean revert if risk turns.
Source: LSEG Workspace
No inflation...unless you need commodities
BCOM vs US 10-year breakevens tells a different story. Full note here.
