Bond market options volatility estimate crossed 115 for first time in 10+ months. Such spikes often marked local bottoms in S&P 500, and $SPX was positive 3 weeks later in 8 of 10 cases. This also aligns with the 6 week timeline President Trump mentioned for ending the war.
As of today, S&P 500 closed negative for 5th consecutive week for first time since 2022 and only second time in nearly 15 years. $SPX was higher following week just 3 of 14 times since 1980. Since 2000, the index lost at least 3% from the 5th week close within next 3 months.
An official mediating between U.S. and Iran told The Times of Israel that President Trump appears to be leaning toward ordering a ground operation. In prior major cases with boots on the ground, S&P 500 held up well, turning positive 17 out of 18 times over following 6 months.
Intraday reversals in S&P 500 over the past few days were off the charts!
In 50 trading days, $SPX saw 24 sessions that flipped positive to negative and vice versa.
Similar whipsaws were last seen only during the 2022 bear market and ahead of the 2008 financial crisis.
Oil shock, potential for high inflation, and geopolitical conflicts.
How else is 2026 similar to 2022?
Energy is the top performing sector so far, just like in 2022.
Financials and Health Care are the only sectors currently underperforming their 2022 pace.
OECD has raised its inflation outlook across major economies.
G20 inflation is now expected at 4% for 2026.
The U.S. saw a sharper revision, with inflation projected to rise to 4.2%.
OECD is the first major international economic institution to formally update forecasts.
