Tinker Tailor Soldier SPY
"It's all terribly exciting, isn't it?"
“It’s all terribly exciting, isn’t it?”
In Tinker Tailor Soldier Spy, the line is delivered with a straight face — a polite observation that quietly masks a system that no longer quite trusts itself.
That sentiment fits markets rather neatly right now.
On the surface, things look fine. Indexes are elevated. Volatility is subdued. Participation is broad enough to keep the mood buoyant. And yet beneath the calm exterior sits an unusual level of tension.
Much like the Circus in Tinker Tailor, we’re watching a market that appears orderly while quietly questioning its own signals. Every move is dissected, every pullback over-analysed, every rally met with equal parts relief and suspicion.
Just take a look at the CNN ‘Fear and Greed’ index.
To me, this feels more like doubt than euphoria despite the evidence - as far as equities and precious metals are concerned - stacking in the bulls favor.
Here’s a quick summary of the present state of play:
50% of S&P stocks are in an uptrend
The VIX is below its 50dma and 200dma
The AD line clipped all time highs last week
SPX hit new all time highs last week
The DAX broke from a multi-month consolidation to hit new ATHs
The FTSE 100 is at ATHs
Breadth has expanded, with rotation continuing to play out
And yet despite this, sentiment remains skeptical, doubt remains and euphoria is absent. It’s a puzzling conundrum.
Everyone knows something is happening. No one is entirely sure what.
In my opinion, it all boils down to this chart - which has been circulating on X like a Cold War memorandum. Let’s break it down.
The price action that’s playing out presently resembles the same action that played out in Q1 2025 right before Trump’s ‘tariff tantrum’ wiped 20% off the S&P500.
An ascending wedge has formed right below a key Fibonacci extension, there’s a bearish RSI divergence in play and an eerily similar gap yet to be filled.
Sure, it’s concerning.
But our job as stock market sleuths isn’t to simply align with prior price action and trade from pattern recognition - no. Our job is to build a case: which, if you’re bearish, looks weak at best.
Assessing Breadth and Volatility
First up, breadth.
What this chart shows is the percentage of S&P500 stocks trading above the 200dma throughout Q4 2024 through to the present day. Does this show breadth deterioration like we saw in Q1 of last year? No.
Whereas in Q4 2024 through to the April lows in 2025 the percentage of stocks trading above the 200dma remained pinned below a declining 50dma and 200dma, breadth has remained above this key watermark since dropping briefly below in November of last year -and is currently supported by the 50dma and attempting to reach new multi-month highs.
Next up, the VIX.
Just look at the janky price action that played out in Q4 of 2024 and Q1 of 2025 and compare it to the last few weeks - see the purple shaded boxes for reference.
From November 2024 through to April 2025 the VIX largely held above the 50dma (red line) and 200dma (blue line), whereas during the same period in 2025/2026, it has remained pinned below both of these levels.
What does this mean?
In short, whilst SPY and QQQ are mirroring the price action we witnessed in Q1 2025, the underlying strength of the market suggests that we’re not in the same regime at all. Similar, maybe - but definitely not the same.
Sure, you could argue that crypto’s crash from ATHs is indicative of pending doom - but given that crypto has remained weak for the better part of 3 months rather than the 1 month lead it showed in Q1 2025 suggests that’s where the similarities end.
Could I be wrong? Absolutely. But until we see the evidence flip in favor of the bears, I’m sticking to my bullish thesis and positioning myself for a break higher from current levels.
How will we know when the evidence flips? Easy.
The VIX will reclaim the 50dma and flip from resistance to support
Breadth with deteriorate and the % of stocks trading above the 200dma will slip below the 50dma and 200dma
Credit spreads - which remain muted - will reclaim the 50dma and make a series of higher lows
Crypto will continue to bleed out with present pennant formations breaking to the downside
SPX will fail to make a new ATH and downside moves will accelerate
Should these things play out over the coming days and weeks, then sure I’ll reassess and position myself for further downside - but for now, none of these boxes are being ticked. So why so bearish?
Current Positions and Setups
After making 120% on my initial COIN position I’ve rolled the profits into the 260C expiring in March. Although it’s pretty much a free hit, I’m keen to lock in some gains - so I’m using a tight stop below last week’s low. Personally, I don’t think the pennants that have formed on Bitcoin and Ethereum will resolve lower - but if I’m wrong, my stop loss will protect me. Until that’s hit, I’m happy seeing where this one goes.
Everyone is bearish AAPL right now after a swift decline from last month’s high. All I’m seeing is price retracing down to a key fib and potential support. Last week’s low works as a tight stop for a potential move back towards the 265 pivot.
META continues to frustrate bears and bulls as it coils between the AVWAP from the prior lows and the ATHs. So long as the lower edge of the flag holds as support, I remain bullish. A break below last week’s low at 634 puts bears in control.
Despite getting stopped out of my initial position, I’m keeping an eye on ALAB after it locked in back to back inside days last week. A break above 165 is what I’m looking for a short term swing, targeting 180-200.
MRNA made a golden cross after finding buyers at a key support level. I’m holding common stock so long as the 50dma continues to move in the right direction. Volume suggests I’m not the only one buying down at these levels.
FUTU calls will open in the money if pre-market gains hold up. Looks flaggy above the 50dma with the prior highs my initial target.
MSFT below the AVWAP from the April lows isn't a great look. Needs to reclaim 481 during the weekly session to avoid a potential flush. Seeing this one as a canary down the coalmine.
Closing thoughts
In Tinker Tailor Soldier Spy, the truth doesn’t arrive with a bang. It emerges slowly, almost awkwardly, as fragments start lining up in a way that can no longer be ignored.
Markets tend to work the same way.
The real signal won’t come from headlines, narratives, or the loudest voices on X — it will come from participation, from breadth, from the quiet confirmation of price itself.
And as always, nothing here is financial advice. This is simply how I’m reading the tape right now — not a recommendation to buy, sell, or hold anything. Do your own research, know your own risk, and size accordingly.
Best,
Al