This Rally Isn’t What You Think

Mid-Week Thoughts

The market has a strange feel to it this week. It’s not weak, but it’s not strong either… It honestly feels like the whole market is waiting for Nvidia next week to give it permission to move again. Everything else feels like noise.

Mag7 has finally exhaled, and the market doesn’t care. You had days where AI names traded heavily and yet index barely moved. I would say that’s healthy. In the past, even a sneeze in this space sent the whole market lower. Now, money just moves sideways into defensives, cyclicals, even parts of Europe and EM. Volatility has drifted up again, but it’s the “I should probably hedge something” type of vol, not fear IMO. Rates vol is dead, FX vol is dead. Equity vol is basically reflecting people waking up after months of complacency.