To The Moon

📊 Market Pulse

I’m convinced this session marked a clean regime confirmation rather than a reflex bounce. US equities delivered a powerful, broad-based advance as geopolitical premium was stripped out and internal participation expanded decisively. The $DJI surged +588 points to 49,077. The $SPX closed at 6,875.62 +1.16%. The $COMP finished at 23,224.8 +1.18%. The $RUT again led, up +2.00% to 2,698, marking its 13th consecutive session of outperformance versus $SPX. That sustained small-cap leadership is a textbook breadth thrust and rarely appears in fragile markets.

Intraday structure reinforced the message. Futures jumped early after President Trump stated at Davos that force would not be used regarding Greenland. Markets consolidated into midday as the 10-year Treasury yield and USD ticked higher, then re-accelerated into the close after confirmation of a NATO framework that removed new European tariffs scheduled for February 1. I’m convinced this was real money re-entering liquidity pockets once geopolitical risk was repriced lower, not short-covering or mechanical CTA flow.

Sector rotation was decisive. All 11 sectors finished green, flipping from Tuesday’s worst breadth reading of the year to the strongest. Leadership came from Energy +2.38%, Materials +1.87%, Health Care +1.80%, and Industrials +1.71%. This was the “other 493” driving returns. Information Technology finished positive at +0.99% but was not dominant. Consumer Staples +0.25% and Utilities +0.20% lagged despite being green, a clear risk-on signal. Staples have now closed higher eight of the last nine sessions, yet leadership has rotated decisively away from defensives.

Breadth and volume confirmed the trend. On the NYSE, advancers beat decliners 3,498 to 1,036, with up volume more than double down volume. On Nasdaq, advancers ran 8,704 versus 2,583 decliners. New highs overwhelmed new lows on both exchanges. Roughly 100 $SPX components gained more than +3%, while only four fell more than -3%. This asymmetry confirms institutional accumulation, not exhaustion.

Volatility collapsed in confirmation. The $VIX closed at 16.9, down -15.88%. I’m watching this as a classic volatility crush driven by dealers long gamma and systematic strategies increasing net exposure as realised volatility compresses.

🏦 Fed Watch

I’m watching rates closely, but I’m not seeing stress signals. The 10-year yield and USD firmed modestly after tariff headlines, yet the move was orderly and contained. The curve continues to reflect stable financial conditions with no front-end dislocation or abrupt repricing of the terminal rate. Real yields remain supportive of risk assets.

A critical institutional backdrop was the Supreme Court hearing involving Fed Governor Lisa Cook. Justices voiced strong concern over the attempt to remove her, reinforcing expectations that the Fed remains insulated from political pressure. I believe this materially reduces policy uncertainty and caps upside tail risk in rates.

Adding to the global rate picture, UK inflation surprised higher at 3.4%. I’m watching this closely as it feeds into global rate expectations and reminds markets that disinflation remains uneven, even as US financial conditions stay accommodative.

📈 Earnings Spotlight

I’m convinced earnings season continues to validate the broader tape, though dispersion is increasing. Q4 results leaned positive overall. $SCHW met expectations at $1.39. $IBKR delivered a clean beat at $0.65 versus $0.59, confirming strong trading activity and operating leverage. $JNJ printed $2.46 versus $2.44, steady margins with no guidance reset. $TRV delivered a standout upside surprise at $11.13 versus $8.85. $UAL beat with $3.10 versus $2.94, reinforcing travel demand resilience.

$NFLX was more nuanced. While Q4 EPS beat at $0.56 versus $0.55, shares slid post-earnings as Q1 guidance came in at $0.76 versus $0.82 expected. Higher programmatic spending and Warner Bros. deal costs weighed on forward margins. I’m watching this closely as a thematic signal that content and AI-related capex competition is becoming a near-term headwind for parts of media and tech.

Within megacaps, leadership remained selective and healthy. $LLY advanced +3.6% for a second straight session, continuing to dominate on fundamentals and momentum. $NVDA and $TSLA each gained roughly +2.9%, reinforcing AI capex and EV exposure. $MSFT lagged at -2.3%, a rotation rather than a structural breakdown.

Consumer staples saw rotation pressure. Kraft Heinz declined between -3.9% and -6.15% on reports that Berkshire Hathaway may sell part of its stake. I’m convinced this reinforced the rotation away from low-beta defensives and into cyclicals and growth.

Semiconductors remain structurally bid. $MU is now up +37% year-to-date in just three weeks, with market cap exceeding $430bn, overtaking Costco to rank 17th in the $SPX. This move aligns with accelerating data centre and AI memory demand rather than speculative excess.

📊 Options Flow Radar

Options markets reinforced the risk-on narrative. Unusual activity skewed heavily toward calls. $GLD traded over 2.3 million contracts, with calls outnumbering puts by more than 3 to 1, signalling upside hedging rather than fear. $NFLX, $INTC, $AMD, and $SNDK all showed elevated call volume relative to average, consistent with upside chase rather than downside protection.

I’m watching $SNDK particularly closely. The stock is now up +112% year-to-date, with persistent call activity and strong spot momentum. It has become a sentiment and momentum bellwether within the AI storage complex.

🧠 Volatility Check

Implied volatility compressed sharply across indices with skew flattening. There is no evidence of aggressive downside hedging. Put walls remain well below spot in $SPX and $QQQ, while call interest continues to build at higher strikes. I’m watching the nuance that $SPX is sitting in a negative gamma setup, which can amplify moves if flows reverse, but current skew behaviour suggests reduced downside anxiety rather than imminent instability.

🌍 Global Macro Currents

Geopolitics were the dominant macro catalyst. President Trump confirmed that force would not be used regarding Greenland and announced a NATO framework removing the threat of new European tariffs. That de-escalation reversed what had been a sharply negative stock-by-stock tape earlier in the week and stripped geopolitical premium from equities.

Commodities added important signal value. Energy leadership was reinforced by an extraordinary surge in natural gas futures, up roughly +20% intraday and more than +50% over two days, driven by an Arctic cold front boosting heating demand. I’m convinced this supports energy outperformance without signalling a supply shock or macro stress.

Gold extended its record rally to $4,834, up +1.43% on the day. I’m watching this as evidence that safe-haven demand has not fully disappeared, even as equities reprice de-escalation. That coexistence matters for cross-asset interpretation. FX and EM assets remained stable, keeping global cross currents constructive.

🧭 Risk Positioning Insight

I’m convinced positioning is now the key tension. Advisor sentiment turned more bullish last week, with bulls at 59.6% and bears at 15.4%. The bulls-minus-bears spread sits at 44.2%, placing it in the 95th percentile historically, an extreme optimism zone. BofA’s Bull and Bear Indicator has reached 9.4, a hyper-bullish reading that historically argues for tactical hedging rather than wholesale risk reduction.

Despite these sentiment extremes, internals continue to argue for accumulation. Thirteen stocks with market caps above $100bn gained more than +3% today, including $INTC, $AMD, $MU, $IBKR, $VRTX, $DE, $GILD, $AMGN, $LLY, $UNP, $DHR, $LOW, and $ADI. Only four $SPX names fell more than -3%, led by $APP and $ORCL. This asymmetry confirms institutional accumulation rather than late-cycle distribution.

Historical context reinforces the upside skew. When $SPX trades within 1% of a 1,000-point increment, forward returns have averaged +1.33% over two weeks, with 100% of one-year returns positive and averaging +16.29%. I’m watching this closely because the market is not stalling near round-number levels.

I’m monitoring closely for signs of de-grossing, a volatility regime shift, or breadth fracture. None appeared today. I’m convinced the path of least resistance remains higher, but upcoming GDP and PCE releases represent clear volatility triggers if surprises emerge.

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Trade like a boss! Happy trading ahead, Cheers, BC 📈🚀🍀🍀🍀 @Tiger_comments @Daily_Discussion @TigerStars @TigerPicks @TigerObserver @TigerWire @Tiger_Earnings