The Breakout Continues (But...)

Does anyone really know what happened in Geneva over the weekend?

Good morning:

After yesterday’s blowout rally, futures are holding steady ahead of the CPI report, as sidelined capital begins to reposition itself into risk. I have a hard time buying into the sustainability of this rally… but that doesn’t mean it can’t keep running…

According to BofA, fund managers were the most underweight US stocks in two years, and hedge fund net leverage was sitting at five-year lows. That helped turn the weekend’s bullish catalyst into a full-blown scramble higher.

Momentum strengthened again overnight. We’re now in one of the most stretched momentum conditions we’ve seen in some time… with only one S&P name (Match Group - MTCH) currently breaking down. That kind of imbalance often sparks contrarian takes, but trying to short into this kind of flow rarely works.

Fighting momentum this extreme is a good way to get run over.

Big Tech was already on the rise before the weekend, but the tariff pause lit the fuse.

Microsoft closed at a 2025 high. Nvidia, Amazon, and Tes…