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- Alpha Report Issue #110
Alpha Report Issue #110
The Current State of The Market
Brandon
December 07, 2025
Current read is 40 on the fear greed index vs 24 last week.
I only put the fear greed index in here cause I know many people look at this.
I disagree with the 40 reading and put this closer to 60 (So in the neutral category.)
We are within a few percent of ATHs… We can't be extreme fear and be that close to the highs… Doesn’t make sense.
Market Fearful = Potential Opportunity/Deals. (consider buy calls/sell puts/buy shares)
Market Greedy = Potential Over Valuation. (consider buy puts/sell calls/sell shares)
I like to be bullish when there is extreme fear
I like to be bearish when extreme greed.
Opportunity is out there, just gotta find it!
Current Fear/Greed Index (I disagree with this number, I put it at 60, not 40)
Historical Fear/Greed Index Level.
SP500 decently above 125DMA (even though it says neutral in the top right, this is actually greedy, another thing I disagree with and why the overall number of 40 is artificially skewed lower)
Put/Call ratio still shows people are still bullish because this number is below 1. Below 1 = more people buying calls. Above 1 = more people buying puts. Notice how there was lots of puts being bought when the market was falling in April? Ya, most of those all expired worthless. Thats when I was selling them! So again, the fear greed index is skewed and this is not fear as shown in the top right.
Volatility is critical to understand cause it directly impacts options premiums & we capitalize on this!
30 year fixed mortgage rate climbed to 6.12% Today, vs 6.11% last Sunday.
10 year treasury bond yield climbed to 4.13% Today, vs 4.01% last Sunday.
2 year treasury bond yield climbed to 3.55% Today, vs 3.49% last Sunday.
Bonds were volatile this week as the market is trying to price in what the fed is going to do with interest rates this upcoming week.
As I always say, interest rates are gravity!
As interest rates/bond yields DECREASE, stocks become MORE attractive because bond yields go DOWN which makes the risk free bond look LESS attractive.
What’s up everyone!
Hope you’re having a great weekend & did something productive!
Here is what we got going on right now.
Let’s Break It Down:
Hope everyone had a great week!
So this past week the marked climbed a little bit as investors are now expecting a 0.25% interest rate cut on Wednesday.
At the time of writing this, the odds of getting the cut is at 88%.
As you know by reading this report and what I say on X/YouTube, interest rates are gravity!
As rates fall, stocks become more attractive and the economy usually does a little better.
The key thing to understand is the reason for cutting though.
Are we likely cutting this week “just because” or are we cutting because “something bad” is happening.
I put it somewhere in the middle.
While the economy is doing ok, it’s not ultra strong IMO.
To build on this, I comb through dozens of economic reports every week and I build a thesis based on the totality of the data.
This chart below is something that I keep updated in discord, but I will show you a screenshot here just so you can see how I rate the overall economy.
This is based on all of the data that I personally comb through and score it.
Also keep in mind, the economy is just one part of making a good investment.
I also dive deem into dozens of companies every quarter to build a strong thesis on earnings, Ai demand, consumer spending, valuations, overall growth, ect…
So the totality of the data is what makes us good investors & build ultra deep conviction to make plays.
We do not day trade.
This is all longer duration plays.
Some months there are 10 “table pounders”
Some months there is 1.
It really depends on what is going on overall.
But the point I am getting at is this… I do my research on everything that matters to make solid stocks & options plays.
When something compelling comes up, I do it, & most of the time it works.
But you gotta be patient.
This market is a little expensive overall and we should not have 20% ROIs for the SP500 as our base case.
I expect lower future returns for the next 5 ish years because of the valuation we are currently sitting.
Lots of the “ai craze” is priced in already.
The market taking a dip or going sideways for a little bit is totally justified and you should be prepared for that!
As for some of the specifics that happened last week, we can talk super quick about Ai.
Marvell dropped earnings and their guide for a few years out was VERY strong for data center growth.
That helps us build conviction in the Ai play.
Yes, it will be volatile though.
Ai is something that is going to transform everything for both the good and the bad.
The key is to invest with stocks & options in the most highly yielding way with the lowest risk profile.
We always keep ratios in check and never get over leveraged.
Long term investors are the ones that win BIG in this environment.
Not day traders.
There is lots of opportunity out there right now & the key is to capitalize when it makes sense.
I sell puts portfolio secured, buy some calls, & buy some shares.
The system is ULTRA simple, yes to many people try to complicate it.
If you wanna learn more about this, I made a 3 video series on YouTube that will help you out.
Click the link towards the bottom to subscribe to my YouTube& watch the “Start here” playlist.
Lots of ppl have told me it helped them a lot!
Beyond that, this upcoming week we have a few big earnings reports and of course the fed meeting for interest rates.
I will be breaking it all down live in Discord as always!
Ok, I will end it there!
As always, I am rooting for you and want nothing but wealth & health for you & your family!
See you in next weeks newsletter!
-Brandon
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