Interesting times in the stock market. At 1 PM yesterday, it seemed the world was on the verge of collapse as the S&P 500 tested 5,950, seemingly poised to head straight for the JPM collar. Xers were tweeting that the Strait of Hormuz was closing, declaring oil would soon hit $150. They even shared charts tracking tankers, as though they’d suddenly become shipping experts.

But just like when Moses parted the Red Sea, everything shifted, and it was good.

Financial media decided Iran’s retaliation was less severe than feared, oil prices collapsed, and stocks surged. By evening, a ceasefire had been reached. Amazing how quickly things can change—as if the market had anticipated a ceasefire all along.

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But in the meantime, when you have a 95 bps move followed by a 1.1% move, guess what? Realized volatility is bound to rise, especially when the 21-day realized vol is sitting at just 11.3. And it did—jumping to 11.8, even as the VIX dropped to 17.5.

This puts us exactly back where the index stood on June 12. It also means future moves higher must become significantly smaller if the index is to keep rising without pushing implied volatility up. Sure, we might jump another 1%, 2%, or even 3% tomorrow, but watch closely as the VVIX starts to climb, with the VIX soon following—creating the vaunted “spot up, vol up” scenario.

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Anyway, the cycles for the S&P 500 are supposed to be rolling over. Will this be the time the cycle doesn’t work? I don’t know. However, the 120-day cycle has been remarkably consistent—sometimes it’s late, sometimes it’s early, but it’s always arrived.

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But more importantly, the 180-week cycle, which we began discussing back in September, still suggests that this cycle is in its early innings—and historically, this cycle has tended to deliver. One notable aspect is that, during large bull markets, the cycle sometimes produces sideways trading action instead of driving the index sharply lower. We may currently be in a sideways cycle, potentially lasting until October… of 2026. Of course, I don’t know for sure—nobody does—but that’s what the cycle suggests.

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Finally, general collateral rates traded up to 4.4%, suggesting SOFR should move a bit higher tomorrow as we enter the end-of-quarter liquidity squeeze. Additionally, once the Big Beautiful Bill passes, the Treasury General Account (TGA) will likely need replenishing, depending, of course, on the Treasury’s target balance.

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What’s really lost in these commentaries is my sense of humor and sarcasm—I’ve never quite figured out how to capture that in written form. But I’ve been watching plenty of Netflix with closed captions on (eyebrows raised), so perhaps we can sprinkle that in somehow (smirk).

I could also try stand-up comedy (with a big smile), if this market thing doesn’t work out.

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