In this episode of Facts vs Feelings, Ryan Detrick, Chief Market Strategist at Carson Group, and Sonu Varghese, Chief Macro Strategist at Carson Group, welcome back JC Parets, founder of Trend Labs (formerly of All Star Charts), for a wide-ranging conversation on market breadth, momentum, and where the “dumb money” is currently making its biggest mistakes. JC walks through his deductive approach to markets, using breadth data like the NYSE advance decline line and the percentage of Russell 3000 stocks above their 200-day moving average, to systematically rule out a bear market thesis, the same way a sommelier deduces a wine varietal.
The conversation covers the dollar’s surprising resilience as a headwind, the extreme dispersion between software and semiconductor stocks, why crypto and tokenized equities represent “the future of finance” rather than nothing of value, and why the S&P Bank Index breaking out above its 2007 highs is one of the most underappreciated bullish signals in the market. JC and Sonu also challenge the margin debt to GDP scare narrative, put leveraged ETF flows in perspective, and discuss portfolio construction through uncorrelated strategies rather than benchmark chasing. They close out with career advice on social media, JC’s favorite cities to visit, and a debate over India’s food scene.
Key Takeaways
- The NYSE advance decline line closed at an all-time high, and the percentage of Russell 3000 stocks above their 200-day moving average is at cycle highs, both inconsistent with bear market conditions, which require broadening weakness across new lows, not just a handful of names.
- Despite a rallying dollar this year, equities have held up well; a dollar rollover (speculators are currently net long and near extremes) could act as a tailwind for risk assets, emerging markets, and Latin America.
- Correlation between software stocks and the broader technology index fell to near zero (versus a typical ~70), an extreme unwind that’s now driving a “catchup” rotation back into software as some semiconductor strength cools.
- The S&P Bank Index just broke out above its 2007 Great Financial Crisis highs, alongside breakouts in mid cap financials, small cap financials, and European financials, a broad-based signal JC argues is very difficult to reconcile with an imminent recession.
- Margin debt scares are overstated when framed against GDP; relative to total stock market value, leverage is near multi-decade lows, and leveraged ETF products remain a rounding error (about 0.25%) of total market size.
- Small cap and large cap value are hitting new multi-month relative highs versus growth, offering a potential diversifier to a volatile, whipsaw prone momentum factor.
Jump to:
0:00 — Welcome and Price as Proof
2:54 — Breadth Signals Still Say Bull
9:01 — Bitcoin Bets and Dollar Tailwinds
10:52 — Tech Dispersion and Software Catchup
12:53 — Crypto Rails and Tokenized Stocks
15:58 — Financials Breakout Challenges the Bears
24:59 — Margin Debt Myths and Leverage Reality
30:02 — Momentum Whiplash and Value Diversifiers
34:06 — From All-Star Charts to Trend Labs
39:40 — Uncorrelated Strategies Beat Benchmark Anxiety
42:56 — Technician Mentors and Who to Follow
48:00 — Social Media That Builds Careers
55:18 — Crack Spreads and Energy Signals
58:31 — Gratitude and Final Takeaways
Connect with Ryan:
- LinkedIn: Ryan Detrick
- X: @ryandetrick
Connect with Sonu:
- LinkedIn: Sonu Varghese
- X: @sonusvarghese
Questions about the show? We’d love to hear from you! factsvsfeelings@carsongroup.com
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