Some bear porn (and a banger of a trade idea)

I’ve been bearish all risk assets for over a month, and so far that has been working out according to plan. The tariffs I said Trump would impose have gone into effect today, despite the market believing until the last minute that there would be a deal to stave them off. Although a lot of pain has been felt in individual stocks, sectors, and markets (including crypto), I think we are only halfway to one-third through this current drawdown.

I’ve already laid out the fundamental reasons why I’m bearish here, here, and here, so I will just leave you with a few scary charts, and then present a highly asymmetric trade idea for those who want to bet on a volatility event with limited downside.

Support in S&P 500 futures is at 5810, and a break would trigger an acceleration lower, fueled by deleveraging and an unwind of trend following hedge fund positions. A garden variety 10% drawdown takes it to 5545, while a more violent 15% drawdown takes it to 5235.

Microsoft has been a market leader in the MAG7 AI theme and it’s looking over the edge of a cliff.

MSFT weekly

Nvidia is teetering at support, last seen when the Deepseek drama came out.

NVDA weekly

Tesla has reversed its entire post election rally.

TSLA weekly

The 21-23 zone in VIX tends to be pivotal in determining when a “dip” turns into a “volatility event”.

VIX daily

Now that the bear porn is out of the way, here’s an interesting trade idea that pays out 9 to 1 if the bottom falls out of the market in the next couple weeks. Sure, one, could go short ES futures, go short USD/JPY, or go long Treasuries, but I’ve already had those trades on for weeks. I want to be able to add to my risk-off exposure with limited downside. If you’re a paid subscriber read on…