To The Moon

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NVIDIA(NVDA)$ I’m watching the market’s underlying mechanics align in a way I haven’t seen since 2019, and the data points are converging on one outcome: continuation, not collapse. From accelerating M&A flows to Fed policy dynamics and stabilising gamma exposure, the evidence argues for structural strength rather than exhaustion.

💰 M&A Surge Validates Expansion Phase

U.S. M&A transaction value has surged past $2.5T YTD, up 38% from 2023. Evercore’s Julian Emanuel calls the Novo–Pfizer bid for Metsera “an accelerating M&A cycle reminiscent of the 1980s takeover wars.” Private-credit dry powder now exceeds $287B, fuelling leveraged-buyout momentum at its fastest quarterly pace since 2021. Across 11 Fed-easing cycles since 1980, when M&A value rose >30% YTD, the S&P 500 delivered median 12-month forward gains of +17.2%.

📊 Breadth and Signal Context

A confirmed Hindenburg Omen triggered on 28Oct25, meeting all five technical criteria. Yet back-tests since 1985 show only 41% of these signals led to >10% drawdowns within six months. The 2021 and 2023 instances both preceded gains of +16% and +22% before consolidation. Market breadth remains firm: 68% of S&P 500 stocks trade above their 50-day averages, while the RSP/SPY ratio (0.87) has reclaimed its 200-day EMA. Since 2019, every Fed rate cut executed within 2% of all-time highs has resulted in new highs within 90 days.

💼 Earnings Expansion with Margin Strength

Of 308 S&P 500 companies reporting, aggregate sales growth stands at +9.7% YoY, EPS growth at +12.9%, and net margins have widened +42 bps to 13.1%. Firms posting double beats (63% of reporters) outperform by +1.1% one week later, while double misses (11%) underperform by –5.3%. Sector leadership: Healthcare (+14.2% EPS surprise) and Industrials (+11.8%), confirming durable cross-sector resilience.

⚙️ Gamma and Liquidity Framework

Dealer gamma turned positive at SPX 6825 on 29Oct25, now measuring +$4.2B per 1% move; the highest since July. This configuration compels dealers to buy dips below 6800, stabilising volatility. SPY dark-pool clusters anchor at 680.01 (JPMorgan) and 676.90 (Citadel), with resistance stacked between 685–688. Price action above 6825 continues to favour upward momentum.

📈 $SPY up $1.70+ after holding the $680.01 Dark Pool level. Follow the data!

🏦 Macro Backdrop and Yield-Curve Steepening

Futures markets assign a 92% probability of a 25 bp cut on 07Nov25, guiding the terminal rate to 4.25–4.50% by year-end. The 2y/10y Treasury spread has steepened to +12 bps, its first sustained positive slope since Aug 2022. Each prior steepening within an easing cycle coincided with average six-month S&P 500 gains of +14%. The DXY below 103.50 signals relief for global liquidity and risk assets.

📈 Six-Month Momentum Precedent

The S&P 500 has now logged six consecutive monthly gains. Since 1957, such streaks have delivered median 12-month forward returns of +9.63%, with 81% of periods finishing positive. Current valuations (forward P/E 21.2×) and curve structure align with prior expansionary phases, not exhaustion tops.

🧭 Strategic View

I’m positioning for strength, not fragility. The alignment of M&A acceleration, earnings momentum, positive gamma, and policy tailwinds forms a rare structural foundation. Any retracement toward 6760–6800 is, in my view, a controlled reset within a continuing uptrend. I’m staying long, focused, and confident that the next major move is still higher.

👉❓Do you view this as late-cycle fatigue or the start of a new liquidity-driven advance?

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀

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