This Rally Won't End Well

James FoordInvesting Group LeaderFollow5ShareSavePlay(7min)Comments(4)SummaryThe S&P 500's resilience near 7,000 is driven by hedged positioning, CTA flows, liquidity tailwinds, and continued AI trade momentum.Despite supportive flows, I expect significant downside in the next two to three months due to geopolitical risks, persistent inflation, and adverse seasonality.Current VIX levels present an attractive opportunity to hedge with put spreads, targeting a 5–10% correction and potential VIX spike.Maintaining AI and Mag 7 exposure remains prudent, but tactical hedging is warranted given heightened earnings and macro volatility.Looking for a portfolio of ideas like this one? Members of The Pragmatic Investor get exclusive access to our subscriber-only portfolios. Learn More » Marco_Bonfanti/iStock via Getty Images Thesis Summary The S&P 500 is pushing back towards 7,000, and a lot of investors are finding this very surprising. Oil is up 60% YTD, the Iran conflict is ongoing, inflation is heating up, and there’s little help expected to come from the Fed.This article was written byJames Foord27.77K FollowersFollowJames Foord is an economist by trade and has been analyzing global markets for the past decade. He leads the investing group The Pragmatic Investor where the focus is on building robust and truly diversified portfolios that will continually preserve and increase wealth.

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