Author is going heavily into SPY put options, betting on a significant market downturn. The post expresses frustration with market conditions and expects the bull run to end soon.
The market has experienced unsustainable gains since 2023, with SPY up nearly 100% driven by inflated tech valuations and speculative bubble conditions. The author argues that valuations are disconnected from fundamentals and predicts a eventual correction or crash.
Author bought SPY on recent dips and closed positions for significant gains (3K to 16.5K), indicating confidence in near-term upside after market weakness.
The US equity market is outperforming globally because international economies face energy crises and supply chain disruptions from Hormuz closure, while the US has technological leads in AI and defense. Capital flows to US equities as the least-bad investment destination.
The jobs report masks severe underlying economic weakness. Excluding gains from retirement-focused sectors and local government, the US has lost nearly 100k jobs YoY, indicating the economy is in serious trouble despite headline numbers.
Author bought 1DTE SPY calls expecting upside from AMD earnings and government peace talks announcement, resulting in gains.
The author was bullish on SPY short-term, evidenced by their purchase of April 1 expiration calls at $12 each, which gained approximately 700% in value.
Author has been profitably scalping 0dte SPY put options by using MACD momentum as a signal, buying ATM puts during the rally and taking profits on sharp downmoves. The strategy leverages fear-driven volatility to generate 10% daily average returns.
The blockade of the Strait of Hormuz will drive oil prices sharply higher, triggering stagflation (high energy + weak economy). The market hasn't priced in this geopolitical shock, leading to a sharp SPY decline as sentiment shifts from complacency to fear.
Social media and rapid information dissemination prevent sustained market panic, causing dips to reverse quickly. Every major selloff since 2008 has recovered due to panic-induced shorts becoming liquidity for rallies, making large-scale stock market recessions practically impossible.
Supply chain disruptions will force earnings misses and guidance cuts this quarter, particularly among industrials and semis with thin margins and international procurement. The market has not priced in this shock, creating an extinction-level decline for the broad market.
The author believes a market bottom has been reached at September 2025 levels and expects a rally back to SPY 7000 by end of year, citing a geopolitical development (Trump administration's Strait of Hormuz coalition announcement) as a potential catalyst.
The S&P 500 is currently correcting but earnings fundamentals remain strong with 80%+ beat rate. Once geopolitical tensions (Strait of Hormuz) ease or oil supply resumes, commodity prices will fall and fuel a sustained bull market lasting at least another year. Historical precedent suggests high VIX levels (>30) mark excellent buying opportunities.
Author advocates a leveraged long-term investment strategy using diversified portfolios with smart-beta funds and box spread options, demonstrating +27% compound annual returns over 6 years with 3.2x leverage. He argues that maximum leverage (4x) on a diversified multi-asset portfolio produces superior returns versus unlevered index funds and recommends borrowing 2-4x account value to deploy in this strategy.
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