This kind of divergence has only ever occurred during the post-Covid snapback

1. Misery Index. "Misery Index (CPI y/y + unemployment rate) increased for a fourth consecutive month in April and sits at a 3-year high".

2. Implied SOFR vs. Fed Funds. "For the first time this cycle, the implied December 2027 SOFR rate is above the current Fed Funds Rate. The rate cut cycle is officially in question."

3. NDX futures positioning. "Nasdaq positioning has spiked again ... Crowded positioning is *not* a Sell signal, but it strongly suggests most of the juice in NDX has been squeezed, maybe for a while."

4. SPY vs. RSPD/RSPS. The S&P 500 has gained over 17% since bottoming on March 30. RSPD/RSPS is negative over the same period after printing a fresh ~11-month low today. In the past 20 years, this kind of divergence has only ever occurred during the post-Covid snapback, and never with the index near ATHs.

5. Valuation correction. "Talking about an AI bubble doesn't make sense when tech stocks are actually getting cheaper ... The forward 12-month P/E for the S&P 500 tech sector now sits at 23.6, down from its peak above 30 last fall."

ICYMI