Most Are Bullish, Few Are Comfortable

Most traders are positioned for upside, but their fingers are on the trigger

Jun 09, 2025

The market seems determined to make new all-time highs—almost as if it's a foregone conclusion. Consensus isn’t debating whether we’ll get there, but what happens after. A 2.39% move from here? That can happen in a day or two. No one would be surprised.

We’re not dismissing the idea—we’ve been prepared for this scenario since late April and mentioned it again in our May 4th note. But we’re also not pretending the road ahead is that simple.

Options positioning suggests that anxiety has eased. The 6,000 SPX strike is back in the conversation. Barring any major negative surprises, the path of least resistance could be higher for now. But given all we've discussed in recent weeks, we’re not chasing.

That still holds true.

Instead of chasing, we’re preparing: once SPX breaks to a new high, we plan to layer long-dated straddles roughly every 150 points.

The Ponzi Awareness

Among short-term traders and communities we follow (small sample, admittedly), there’s a remarkable level of self-awareness. Many know the risk-reward setup is poor but are riding the wave anyway. Some even describe it as “playing the Ponzi.” Fingers are on the sell button. Stops are tight. This is what climbing the wall of worry really looks like.

Longer-term participants aren’t much more optimistic. Many believe economic data will begin to deteriorate by Q3, thanks to tariff-related disruptions and demand pulled forward. Still, they’re being forced to add exposure—just in case the market decides to look past short-term pain. As long as technicals hold and the administration keeps stoking optimism, it will take sustained bad news to shake confidence.

The Illusion of Support

We’re skeptical that the market can be held up indefinitely. Sooner or later, things must either improve fundamentally—or mean revert. Our view is that the tariff drama has already inflicted lasting damage to the economy, and that reality will likely surface in the second half of the year.

And make no mistake: the current tariff levels are far higher than most expected at the start of 2025. The administration has been putting pressures on major companies—calls to Walmart, Jeff Bezos, and others—not to complain about tariffs publicly. But someone has to absorb those costs. If not companies, then consumers. And many Chinese exporters—already operating on razor-thin margins—don’t have much room left to shoulder the burden.

Macro in the Backseat

The latest jobs report was a perfect example of why we’re cautious about those "magical numbers." Headline unemployment stayed at 4.2%, but the real figure ticked up from 4.187% to 4.244%—just 0.001% shy of printing 4.3%. Meanwhile, the market latched onto a headline beat of 14,000 jobs—completely ignoring that March and April were revised down by a combined 95,000.

We’ve seen this pattern before. Data that is already noisy gets spun into a "Goldilocks" narrative by algorithms. What matters isn’t just what’s reported, but what’s quietly revised later. To us, May’s report was far weaker than the market reaction suggested.

The Trump–Musk Feud

We’re not Tesla fanboys, but we respect Elon Musk’s achievements on the innovation side. His willingness to speak honestly about the “Big Beautiful Bill”—earned our respect.

That said, we’re not fans of either party. Politics these days feels more like a monetization of frustration—often the very frustrations created by those in charge. They say one thing to get your votes and do another once in power.

Unfortunately, both Trump and Musk are the type to hold grudges. Even if things appear to deescalate, we think it's only a matter of time before one side takes a shot when they spot vulnerability. So we’re not in the “buy the dip” camp for Tesla. The odds of seeing a double-digit TSLA stock in the next two years aren’t zero—it nearly got there in early 2023. People should stay open-minded and wait for the long-term risk/reward to turn favorable.

As for Robotaxi, the camera-only self-driving approach is a regulatory wildcard. If the administration ever chooses to scrutinize it seriously, the technology may prove too vulnerable to withstand the pressure—posing a direct threat to one of Tesla’s most hyped growth narratives.

Don’t Get Too Comfortable With VIX

After Friday’s jobs report, short-term VIX (under 14 days) dropped meaningfully, and the VIX index closed down nearly 10%. That’s normal when markets rise—but beware of a growing myth: that the market can’t make new highs with elevated VIX.

That simply isn’t true. History shows plenty of new highs happening while VIX is elevated. Don’t rely too heavily on a single indicator to judge market direction.

Yes, new highs are within reach—maybe even tomorrow. But this isn’t a market driven by fundamentals. It’s self-aware, nervous, and fragile, with sentiment propped up by momentum and intervention. We’re not ignoring the trend—but we’re not blind to the risks either. We're positioning cautiously, hedging as needed, and staying alert for when the music stops.

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Earnings This Week

For the week of June 09, 2025, notable earnings releases for companies with a market cap above $2 billion include:

2025-06-09: AM WDS 0.00%↑ VFS 0.00%↑

2025-06-09: PM CASY 0.00%↑

2025-06-10: AM SJM 0.00%↑ CNM 0.00%↑ ZK 0.00%↑ CIG 0.00%↑ ASO 0.00%↑

2025-06-10: PM GME 0.00%↑ GTLB 0.00%↑

2025-06-11: AM HLN 0.00%↑ CHWY 0.00%↑ SAIL 0.00%↑

2025-06-11: PM ORCL 0.00%↑

2025-06-12: AM FER 0.00%↑ KEP 0.00%↑ FRHC 0.00%↑ KFY 0.00%↑ RH 0.00%↑

2025-06-12: PM ADBE 0.00%↑

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