Zenolytics

Uncovering secular trends before they’re consensus.

Macro insight with timing precision.

Advisor to hedge funds, investment advisors & retail investors.

[Zenolytics @AMeshkati]

A good reminder.

When I said this in May of last year, the SPX was 1000 points lower.

A year from now it will be 1500 points higher and investors will still be wondering how the markets are climbing when everything is so scary.

https://t.co/kYuW2W3jH2

[Zenolytics @AMeshkati]

Few understand that the chaos the Trump admin brings to the table creates the perfect combination of offsetting dynamics for vertical upside at this stage of the cycle.

Can count on one hand how many investors understand the power of this dynamic.

Nobody gets what is coming.

[Zenolytics @AMeshkati]

Today's move down only further enhances the upside.

Market is rushing.

[Zenolytics @AMeshkati]

Flashbacks of June 2020.

[Zenolytics @AMeshkati]

Today's high for the NDX?

30762

An excerpt from this Sunday's Turning Points.

[Zenolytics @AMeshkati]

Cute....

https://t.co/RHx0LLBqHm

[Whitney Baker @TotemMacro]

@AMeshkati This will age poorly

[Zenolytics @AMeshkati]

2026 will be forever be known as the time when investors had the opportunity to invest in the foundational infrastructure of the literal matrix but chose to worry about margins and AI spend, while running dot com correlations.

[Zenolytics @AMeshkati]

As explained in this past Sunday's note... support and resistance levels are only relevant in that they create a valuable measuring stick for market performance.

How the market reacts to these levels can tell investors quite a bit about its next move.

https://t.co/ZaZqS4yCZR

[Zenolytics @AMeshkati]

Today's high for the NDX?

30762

An excerpt from this Sunday's Turning Points.

[Zenolytics @AMeshkati]

Today's high for the NDX?

30762

An excerpt from this Sunday's Turning Points.

[Zenolytics @AMeshkati]

The 8000 price target I discussed back in April, when the SPX was hovering near 5000, seemed almost delusional at the time.

Over an intermediate term timeframe this idea no longer seems unreasonable as the market has adjusted expectations.

Now extrapolate this same concept over years.

The market will continue to adjust expectations accordingly as unreasonable becomes the baseline.

The market will also continue to mask its intentions behind a cloak of volatility with increasing intensity as the bull market matures.

Becomes more important than ever to understand the principles of a secular cycle along with their absolute nature.

[Zenolytics @AMeshkati]

The disappointing Q4 for risk assets, punctuated by an even more disappointing December of trading, has created one primary effect that has led to the creation of three secondary effects.

Primary Effect - A compression of volatility that will be violently unwound in the direction of the primary trend.

Secondary Effect - Further cultivation of doubt, turning to fear of the new trading year, creating latent buying power for equities throughout Q1 and Q2 2026.

Secondary Effect - Neglecting the dynamics of the liquidity picture setting up for 2026, which will likely be frontrun by the markets prior to Powell's departure in May.

Secondary Effect - A discounting of secular trends that will continue to drive both growth in the economy and risk assets, primarily focused around unease surrounding the AI trade.

The great paradox is that the secondary effects listed will act in a reflexive manner, acting as an amplifier for the primary effect, creating that much more velocity on the upside in the coming months.

[Zenolytics @AMeshkati]

This level of compression at this stage of the secular bull market with this degree of anxiety and confusion means that when resolution to the upside occurs, it will be violent and relentless.

Take whatever duration and velocity you have for potential upside, multiply by 3.

[Zenolytics @AMeshkati]

Investors are confusing this for a blowoff when it is in fact the sound of a starting gun.

The market is telling investors who choose to listen that we are moving to next phase of the secular bull market.

This is literally the first inning.

https://t.co/1Zc3YH8NH2

[The Kobeissi Letter @KobeissiLetter]

BREAKING: The US technology sector has rallied +42% over the last 2 months, the largest 2-month gain in 24 years.

This also marks the 2nd-strongest rally this century, surpassing even the +40% gain seen during the 2000 Dot-Com Bubble.

The surge has been largely fueled by chip stocks, with the Semiconductor Index, $SOX, rising +66% over the same period.

By comparison, the S&P 500 is up +16% while the Dow is up +10% over the same time period.

Meanwhile, the S&P 500 is up +20% since the March 30th low, with the top 10 stocks contributing ~65% of the index's gains.

Half of the top 10 contributors were semiconductor stocks.

The AI trade is hotter than ever.

[Zenolytics @AMeshkati]

Perceptions of logic and reason as applied to traditional financial metrics related to growth and valuations are about to undergo a significant transformation.

The signals are everywhere.

https://t.co/mctHCMktah

[CNBC @CNBC]

AI revolution is '50x bigger' than the dotcom boom: SoftBank's Masayoshi Son to CNBC https://t.co/4BTdzugZOi

[Zenolytics @AMeshkati]

Berkshire just endorsed the AI buildout that bears spent months trying to convince investors would fail.

Not only did they endorse it, they did so by participating in GOOG's equity offering, effectively declaring that the dilution required to fund the next phase of AI infrastructure won't matter in the long run.

The bullish arrows will only gain velocity from here on out.

Heads will roll.

This is the one.

https://t.co/q0eKkiGZb0

[Zenolytics @AMeshkati]

Everyone is focused on the wave of stock supply set to hit the market as the megacap AI IPOs begin to debut.

The bigger story may be what happens after they do.

By year end, investors will no longer be forced to speculate about the size of the AI economy or the pace at which it is expanding.

For the first time, the market will have concrete revenue, growth, margin, and demand data from many of the most important private companies in the ecosystem.

That information has the potential to completely redefine what qualifies as "high growth."

This record run in the markets is pricing in far more than most investors realize.

The coming wave of AI disclosures may expose a level of growth that makes many of today's seemingly aggressive valuations appear surprisingly conservative.

[Zenolytics @AMeshkati]

Look which sector just surpassed semiconductors for net total accumulation according to Inflection Points...

[Zenolytics @AMeshkati]

Go back and read the first section of this past Monday's Turning Points.

Understand what we are seeing this week is a beginning.

But not just any beginning.

It's a beginning born from suppression and misinformation that is now in the process of blowing up spectacularly in the faces of many.

Upside galore is the natural consequence.

[Zenolytics @AMeshkati]

The AI/software misinformation campaign reached absurd levels just as the market launched one of the most powerful recoveries off the March lows.

That correlation should not be ignored.

The larger the effort to convince investors that an entire sector has no future, the more suspicious it becomes when price moves violently in the opposite direction.

The scale of the misinformation campaign and the scale of the recovery are telling the same story:

The market has much bigger upside intentions than the crowd currently understands.

[Zenolytics @AMeshkati]

Mispricing of the AI timeline continues to be corrected.

Expect significant acceleration as the hardware layer naturally translates into real world outcomes made possible by the software layer.

https://t.co/8kThfj6FDc

[Zenolytics @AMeshkati]

The semi and software trade are opposite reactions along the same curve.

The curve being the rate at which AI acceleration is taking place, with semis acting as the engine, and software, at least for now, becoming collateral damage as that engine accelerates beyond what the system can immediately absorb.

There is little to no discrimination taking place in the unwinding of software exposure, creating the conditions for what will likely prove to be generational opportunities as capital exits indiscriminately.

What the market is grappling with is not AI itself, but the rate at which it is unfolding relative to the system’s ability to absorb it.

Semiconductors represent the creation/engine of capability.

Software represents the layer through which that capability is translated into real world outcomes.

When the rate of capability expansion exceeds the rate of absorption, the result is not smooth adoption, but dislocation.

The market, in its attempt to reconcile the two, begins to reward what is immediate and measurable, while discounting what is delayed and uncertain.

This is a mispricing of the AI timeline, not an Armageddon event for each and every company that possesses code.

[Zenolytics @AMeshkati]

Given the delay in achieving the 8000 target paired with ascending resistance, the upside target prior to a substantial pullback is now in the 8300-8500 range.

https://t.co/PjQGuBsyMw

[Zenolytics @AMeshkati]

Year end target was from April 25th with SPX at 5500.

Closed the year at 6845, slightly above the conservative target range.

This pushes SPX 8000 out to Q2 2026 instead of Q1.

https://t.co/VRMjDwudQS

[Zenolytics @AMeshkati]

@MikeDesep The factors outlined in the note prior to earnings overwhelmed any technical positives that had developed.

The nuances and textures of certain setups are difficult to distinguish.

Takes time.

I've learned to trust my gut after fighting it for a good 20 years.

[Zenolytics @AMeshkati]

We took profits on our NVDA position in the 223 range the morning before earnings were released.

Below is the May 20th note outlining the challenges NVDA was likely to face following earnings.