- look at SPY/SPXEW to get a sense of the weighted 
SPY (tech-heavy led by 10 companies) vs. the equal weight SPY (
SPXEW) to get a sense for how rarely we reach such extremes. these are MONTHLY bars i'm showing
- when the general start to fade THIS DOESN'T MEAN THE MARKET TANKS. it could mean a 5-10% pullback. but what happened last time this occurred in '21 after a big rally of quality out of the covid lows (tech... remember? then everything else) was
IWM (the yellow line)... the "everything else market" got massively bid.
- history often rhymes and doesn't repeat. RATES WERE GOING TO ZERO HERE. And now they're not. that's a MASSIVE wrinkle to be aware of. however, if the expectation is lower rates, at least in the 6-12 month context, small cap that is getting decimated because of a. funding/ cost of capital b. lack of bid and c. more economically sensitive... will get bid, sooner
- in order to not over extend myself and buy some time in developing this thesis, i've gone WAY out and bought some ATM (at the money)IWM 200C for Dec 18, 2026. 28% implied volatility is too low given what we've seen in the past and given how much money could theoretically rotate from these generals into small caps.
- still developing this view, but have made these C's 2% of my book which means the gross value is about a 10% position. i'm willing to neck out here even into extended territory here (on general risk mkts) bc 1. the IV on these options remains sub 30% 2. the expiry is SO FAR out and 3. i remain very cashy - so this is a way for me to get more gross exposure without necessarily deploying a lot of cash.
LMK what you think. will be developing this thinking over the coming months.
V
SPY (tech-heavy led by 10 companies) vs. the equal weight SPY (SPXEW) to get a sense for how rarely we reach such extremes. these are MONTHLY bars i'm showing- when the general start to fade THIS DOESN'T MEAN THE MARKET TANKS. it could mean a 5-10% pullback. but what happened last time this occurred in '21 after a big rally of quality out of the covid lows (tech... remember? then everything else) was
IWM (the yellow line)... the "everything else market" got massively bid.- history often rhymes and doesn't repeat. RATES WERE GOING TO ZERO HERE. And now they're not. that's a MASSIVE wrinkle to be aware of. however, if the expectation is lower rates, at least in the 6-12 month context, small cap that is getting decimated because of a. funding/ cost of capital b. lack of bid and c. more economically sensitive... will get bid, sooner
- in order to not over extend myself and buy some time in developing this thesis, i've gone WAY out and bought some ATM (at the money)
IWM 200C for Dec 18, 2026. 28% implied volatility is too low given what we've seen in the past and given how much money could theoretically rotate from these generals into small caps.- still developing this view, but have made these C's 2% of my book which means the gross value is about a 10% position. i'm willing to neck out here even into extended territory here (on general risk mkts) bc 1. the IV on these options remains sub 30% 2. the expiry is SO FAR out and 3. i remain very cashy - so this is a way for me to get more gross exposure without necessarily deploying a lot of cash.
LMK what you think. will be developing this thinking over the coming months.
V
Note
i had to re-chart thisSPY/SPXEW is the BLUE line
and the bars are IWM
all monthly
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.