To The Moon

This week: sentiment, positioning, selling, election cycles, earnings/macro outlook, monetary valuations, asset class valuations, venture investing thematics, tech sector trouble...$S&P 500(.SPX)$$SPDR S&P 500 ETF Trust(SPY)$ $Cboe Volatility Index(VIX)$

1. AAII Bears

Most bearish reading since 2009. According to SentimenTrader“This week joins just 4 others in 35 years with more than 60% of respondents being despondent in the AAII survey. One year returns after the others: +22.4%, +31.5%, +7.4%, +56.9%”.

So bearish that it’s bullish?

2. Big Shorts:

Speculative futures positioning is heavily net-short.

Albeit, n.b. this group were crowded short and right in 2008.

3. Generational Selling Opportunity:

Intriguing statistics. Seems just about every millennial sold some or all of their investments. Could have to do with life stages, but hard to guess what is specifically driving this. The other key thing that sticks out in this chart is that aside from millennials, everyone else has held tight. That gels withmy previous observationsabout the difference between very bearish surveys vs relatively minor movement in equity allocations and margin positions.

4. Presidential Election Cycle:

Clearly there is a lot going on, and so naturally the instinct when presented with achartlike this can be to dismiss it and say “yeah but this time is different”. And many things are different. But still, it is an interesting observation, and could become more interesting if there happened to be any (perish the thought) positive surprises.

5. Friendly Reminder:

Strong dollar = tighter financial conditions (= recession = earnings go down). Hard to escape the reality ofmultiple mounting headwinds, and the inevitable negative impact on earnings.

6. Earnings Recession:

Judging by the S&P Global PMI indicators, an earnings recession is on its way. Seems like just about every week we see a new chart with a new indicator pointing to recession/earnings collapse!

7. Stock Price Crash Drivers:

Interesting yet somewhat unsurprising chart.

When it comes to individual stocks, bad earnings announcements are the leading cause of stock price crashes. I would guess we can probably extrapolate this out to the macro/aggregate index level...

8. Real High Real Yields = Real Problem:

Monetary tides going out. If you take this chart literally, based on the shift in rates, stocks are still overvalued...

9. Valuations In Perspective:

In absolute terms, US equity valuations are still elevated vs history; expensive. If it’s any consolation, property is wildly more expensive — most extreme reading on record(!). Commodities meanwhile are about neutral, and bonds by now are starting to look cheap.

10. Adventures in Venture Investing:

It's a race between AI/Blockchain/Climate.

https://chartstorm.substack.com/p/weekly-s-and-p500-chartstorm-25-september