2025 TACO PTSD: Why Strategists, Analysts, and Investors Are Still Fighting the Last War
YouTube55 min 5 sec
Note: AI-generated summary based on third-party content. Not financial advice. Read more.
Quick Insights
Investors should shift from a passive strategy to a active trading stance as the S&P 500 (SPY) has broken key technical supports, with a potential downside target of 6,100. To hedge against this volatility and rising inflation, consider tactical Long VIX positions and exposure to the Commodity complex, specifically Silver and Copper. While long-term bullish on Semiconductors and Memory, investors should maintain short-term hedges on the sector due to supply chain disruptions like the helium shortage. Focus AI investments on "agentic" orchestration and infrastructure, specifically highlighting Palantir (PLTR) for its enterprise adoption and the "Whole Rack" data center theme. Avoid broad Financials (XLF) and Private Credit due to hidden valuation risks, while using Bitcoin (BTC) as a long-term decentralization hedge despite potential 20-30% short-term sympathy drops during market panics.
Detailed Analysis
S&P 500 (SPY) / Broad Market
The analyst highlights a significant shift in market regime, noting that the S&P 500 has broken its 126-day (six-month) rate of change into negative territory. This is historically a primary warning sign for recession, occurring only 20% of the time.
- Technical Breakdown: The index is now below its 200-day moving average, following a lead from the financial sector.
- Sentiment Gap: There is a "Taco PTSD" among analysts—meaning they were so wrong about a recession last year that they are refusing to forecast one now, even as data worsens.
- Job Market: When excluding healthcare, the economy shows negative job creation over the last year.
Takeaways
- Price Target: A potential decline to the 6,100 level (roughly a 13% drop for the year) if oil prices don't reverse and inflation data continues to climb.
- Strategy Shift: Move from an "investment environment" to a "trading environment." High volatility and "down-tape" conditions are expected as corporate buyback blackout periods begin.
- Risk Warning: Watch for "capitulation" days; the market is currently in a steady-state decline but hasn't seen the final panic selling yet.
Energy & Commodities (Oil/WTI/Brent)
A "commodity boom" is underway, driven by structural shortages and geopolitical disruptions. The analyst notes that oil is "in everything," meaning higher energy prices will inevitably spike headline CPI.
- Supply Disruptions: Drone strikes on energy facilities (like Roslefon) and potential closures of the Strait of Hormuz are not being fully priced in by the market.
- Inflation Impact: Gas prices are trending toward $4.25/gallon. This creates a "certainty" that year-over-year CPI will move higher in the coming months.
- Secondary Effects: Rising oil prices are already impacting fertilizer (Urea), petrochemicals, and diesel, which will eventually raise food and transport costs.
Takeaways
- Bullish Theme: Maintain exposure to the commodity complex but expect high volatility (50% moves followed by 30% corrections).
- Buying Opportunity: Look to take advantage of temporary weakness in Silver and Copper, as these are essential for the long-term AI/power build-out.
Artificial Intelligence & Semiconductors (NVDA / TSM / ASML / PLTR)
The AI trade has shifted from the "IQ building stage" to the "scarcity stage." The primary bottleneck is no longer just software, but physical compute and specialized materials.
- The Helium Crisis: A major disruption at a helium plant in Qatar (Ras Laffan) threatens the semiconductor industry, as helium is critical for chip manufacturing in Korea and Taiwan.
- Compute as Currency: Semiconductors are the scarcest economic resource. The analyst remains a "memory bull" despite short-term volatility.
- Palantir (PLTR): Highlighted for its "AI Agent Hierarchy" which allows large, unstructured organizations to deploy AI securely. The analyst dismisses criticisms of its high valuation, citing its structural advantage in enterprise adoption.
- Software Disruption: The "SaaS era" is being replaced by the "Agentic era." Small teams (1-3 humans) using thousands of AI agents will replace traditional mid-sized software firms.
Takeaways
- Investment Focus: Shift focus from just "models" to orchestration, memory, multi-agent systems, and autonomy loops.
- Actionable List: The analyst identifies a "Whole Rack" theme—18 names (available to subscribers) that benefit from the physical build-out of AI data centers.
- Short-term Hedge: The analyst is currently Long VIX and holds Short positions in Semis purely as a tactical correction play, while remaining long-term bullish on memory.
Private Credit & Financials (XLF)
The analyst expresses deep concern over the Financials sector, which is the worst-performing sector year-to-date (down 11%).
- Private Credit Risk: There is a "volatility laundering" issue where private loans aren't marked-to-market, hiding losses. Blackstone’s B-Cred recently saw its first loss since 2022.
- AI Exposure: 37% of some private credit portfolios are in software and professional services—the two sectors most likely to be disrupted/devalued by AI agents.
- Systemic Stress: Watch Life Insurers, as they hold massive amounts of private credit. If these loans are marked down, insurance and annuity companies could face liquidity crises.
Takeaways
- Bearish Sentiment: Avoid broad financials until the credit situation stabilizes.
- Monitoring: Watch for the creation of a new "liquidity facility" from the Fed, which would be the signal that the credit crunch has reached a breaking point.
Bitcoin (BTC) & Ethereum (ETH)
Despite broader market weakness, Bitcoin and Ethereum are among the few assets still trading above their 50-day moving averages.
- Institutional Positioning: Mention of a "buy signal" due to excessive short positions (via RenMac data).
- Macro Tailwinds: The potential appointment of Kevin Warsh to a key financial role is viewed as a positive catalyst for Bitcoin.
- Decentralization Theme: AI will lead to a "decentralization of ownership," which reinforces the long-term thesis for crypto.
Takeaways
- Risk Factor: If the S&P 500 falls violently, Bitcoin could see a 20-30% sympathy drop, but it remains a preferred asset for the current regime shift.
- Action: Use Bitcoin as a hedge against the "centralization" of traditional financial systems and the confusion of the Fed.
Ask about this postAnswers are grounded in this post's content.
Video Description
In this week's video, I walk through why this is not last year's market and why the PTSD from the tariff scare is causing analysts and strategists to dangerously underprice what's happening now. The S&P 500 has fallen roughly 2% for three consecutive weeks, is now below its 200-day moving average, and the 126-day rate of change has broken through zero, a signal that has preceded every recession this century. Yet nobody is calling for one.Financials are the worst-performing sector year-to-date, down 11% and 15% off the highs, a breakdown I flagged six weeks ago. Credit is deteriorating: Blackstone posted its first BCRED loss since 2022, with 37% of the portfolio in software and professional services, precisely the sectors most vulnerable to AI disruption. Private credit stress is accelerating, and life insurers hold more of it than ever. Meanwhile, oil prices are surging across every benchmark (WTI approaching $98, Dubai/Oman futures already exceeding 2022 levels), driven by the Ras Laffan attack that knocked offline a critical helium source for semiconductor manufacturing in Korea and Taiwan, and the Strait of Hormuz disruptions the IEA says could take six months to restore. Diesel is up from $3.50 to $5.20, gas futures imply $4.25, and fertilizer disruptions are hitting at planting season. Inflation expectations are spiking, Fed rate cuts are gone, and tightening is now being priced in globally.
00:00–00:51 The speaker says this was another volatile week, but argues investors are getting too extreme in either direction. His main goal is to offer a calmer framework and stress that markets can stay in messy sideways/down ranges longer than people expect.
00:51–02:49 He says the biggest underappreciated warning is credit deterioration, especially in financials, which have been below their 200-day moving average for weeks. He also notes inflation expectations are rising, Fed cuts have been priced out, and even tightening fears are creeping in.
02:49–04:48 He highlights a weakening macro backdrop: zero net job creation over the past year once healthcare is adjusted for, the S&P’s 6-month rate of change has turned negative, and major indexes have been in a steady decline rather than a panic selloff. His point is that recession risk should be rising more than consensus admits.
04:48–06:48 He compares this year with last year and says the setup is very different. Last year, financials were holding up better; this year they are the worst-performing sector. He argues AI has moved from the “IQ-building” phase into a scarcity phase, where compute and infrastructure shortages matter more than model excitement.
07:07–10:23 He argues the market is still too complacent about recession and inflation risk. Two-year and ten-year yields are rising globally, inflation swaps are moving higher, and he believes higher oil and energy prices make upward CPI pressure much more likely than during last year’s tariff scare.
10:23–15:07 A major theme is that there has been no true capitulation yet. He says volatility and credit spreads should be higher given weaker labor data, no earnings revision cuts yet, and growing inflation uncertainty. He also ties the recent war-driven jump in oil, diesel, fertilizer, and petrochemical prices to broader inflation pressure across the economy.
15:07–18:38 He uses examples built with Perplexity Computer and OpenClaw to show how quickly agentic AI tools can create dashboards and workflows. He argues this proves software disruption is accelerating and that AI tools are already replacing expensive legacy workflows like parts of Bloomberg-style monitoring and research.
17:29–20:26 He says war-related infrastructure damage has broadened from just oil to helium and semiconductor supply chains, citing a helium facility outage as a risk for chip production in Asia. His broader point is that these are not simple headline shocks that reverse quickly; they can create lasting inflation and supply-side stress.
29:46–35:19 He spends significant time on private credit and private equity risk, arguing that AI disruption is making some self-marked portfolios especially vulnerable, particularly software and professional services exposure. He references Blackstone, Stone Ridge, Cliffwater, and Boaz Weinstein to argue that these structures could become reflexive and may eventually require liquidity support.
35:19–54:45 He remains bullish on the long-term AI infrastructure and agentic AI buildout, especially around compute, memory, orchestration, and multi-agent systems, even while expecting more near-term equity market weakness. He ends by saying 2026 is a year of higher turbulence: long-duration assets remain vulnerable, commodity-linked AI infrastructure themes still matter, Bitcoin remains relatively resilient technically, and investors should stay alert to inflation without becoming emotionally extreme.
About Jordi Visser
Jordi Visser
By @jordivisserlabs
Empowering seasoned professionals to navigate the future of finance, technology, and AI. What We Offer: - Cutting-edge ...