What does it take to shake this market?
Not tariffs, not war, not even bombing Iran’s nuclear facilities.
, founder of TG Macro and co-host of the Macro Dirt podcast, says “an asteroid” is pretty much the only thing that could derail this market in the short term, given its resilience since the April dip.We caught up with Tony on Talking Markets right before the long July 4th weekend. He was already calling it a “synthetic Friday,” and was in characteristically great form, riffing on everything from gold and uranium to recession bros and the VIX.
Here are the big takeaways…
Oh, and thank you , , , and many others for tuning in on Substack…!
The Market as Honey Badger
Quite simply, it appears to not give a sh*t.
“While we were bombing the snot out of Iran's nuclear facilities, I kept looking at my market watch list to see when the S&P is going to go down 500 and it just didn't happen,” Tony said. “The most we got out of that bombing exercise was like a limp-wristed 20 bid in the VIX and back offered again. It just didn't create any kind of panic on the downside.”
💡It “feels like the path of least resistance for a couple of hundred points [higher] now,” he said. “I think we’re going to start making our way through 6,500 with this move, and then we’ll see… July is seasonally a very positive month, it’s the month of the VIX melt.”
The US Renaissance
Tony said that European hedge funds and mutual funds “blew their brains out into the hands of American retail down to S&P 4,800” earlier this year:
“That stock has gone away into a lockbox in their 401(k) that they’re going to hand over to their children on their deathbed.”
Now, he says, “the Europeans that are going to try to reposition for the US are not going to have a seller sitting there waiting to hand them back their stock… [and] the Europeans are going to have career risk if the US keeps performing and they don’t have any '[exposure].”
Tony is certainly not a buyer of the “US is done overperforming” trade. “I’m going to tell you this is the point where the US goes parabolic over the European deindustrialized souvenir restaurant shops… We’re going to take over as the leader of the G7 economically, and America First is going to put us in a better position competitively against Europe and against Japan.”
Everything’s Getting a Turn at the Top
While most investors obsess over whether the Mag7 is still leading, Tony says this is not a fragile-led tech rally:
“I don’t need Mag7 to lead if my rotation shows a baton handoff between cyclicals, tech, and natural resources depending on the day of the week.”
That baton is moving fast. One day it’s uranium miners. The next it’s aerospace and defense. Then it’s gold miners, industrials, even social media stocks. There’s always a new sector pushing to the top of the leaderboard, and Tony says that’s what makes this market so punishing for shorts.
“It’s everything bubbling up to the top, and it’s really hard to fight that if you’re bearish.”
The Tarnishing of Gold
Tony feels like the only gold bear at the party:
“I’m alone in the cold in gold right now… Gold made an all-time high on April 22nd of $3,500. Since then? Dollar goes down. Gold goes nowhere. I’m sorry, but that sucks.”
Since that April high, the dollar has dropped over 10%, and yet gold has barely budged, which is not what you’d expect. “If you’re long gold, you have to be massively disappointed. Unless you’re so subjective you don’t care,” he said.
Of course, Tony pointed out, there was the Barron’s Cover Curse, which remains almost undefeated(!):
So far, that has been the high.
But it’s the sentiment that concerns Tony, too. He says the whole gold/dollar-debasement trade has become so crowded that it is super mainstream:
“I have national champion lacrosse players from Cornell texting me, asking me about foreign exchange. If that’s not a sentiment bomb, I don’t know what is.”
He’s worried that if the dollar bounces even 3–4%, gold could “get sh*t-canned for 500 bucks.” And given how many investors are now leaning into the same narrative of dollar down, gold up, that risk is no longer hypothetical.
“I'm kind of getting out of the way of that,” he said. I feel like the long precious metal trade is the most popular trade. It's the same as being long tech stocks in 1999 at this point.”
“Trumpzilla Eats the Fed”
Credit to Paul in the chat for the excellent quote above ⬆️
Donald Trump may not hold a seat at the Federal Reserve, but according to Tony he’s already pretty much dragging it where he wants it to go, or at least dragging stuff around it.
“He doesn’t go out and write a note to Jerome Powell about interest rates because he thinks it’s cute,” Tony said. “He does it because it moves the market for him… There’s plenty of things to pick a fight with with [Trump]… and [interest rates] is not the one that you want to pick, in my opinion.”
In Tony’s view, Trump is determined to get rates down, and he’ll find a way to do it. Whether that means jawboning Powell, replacing the Fed Chair midstream, or installing someone more compliant, Tony sees one inevitable outcome.
“He’s going to get them lower come hell or high water… He’s going to get rates to 1% or 2%, like he said.”
That narrative alone, combined with the, uh, ongoing fiscal largesse, is enough to keep Tony bullish risk.
What Tony’s Looking At
“We just had industrial miners [ETF: XME] and uranium miners take off, they made their way onto the top 5 or 6 sector of the leaderboard,” he said. “[Uranium is in] a nascent bull market again. It may be a slow-moving bull market, but if you didn’t get any uranium miners, you’re really missing out on that performance and that narrative that they are going to be looked upon for a bigger source of America’s power.”
“Aerospace and defense have been rifling higher as we’re dropping bombs, that’s something that’s tradable.”
Elsewhere, “you’ve got the platinum trade and silver taking hold,” he said. “The white metals are now competing with gold in that race against fiat currency depreciation… So I keep looking at these store of value trades.”
Tony also flagged homebuilders: after ITB broke his “magic number” of 95, he said this trade is now “green light go.”
“I love being long sectors like the NASDAQ that are trading into all times high territory, because nobody knows where she stops. These are bull market conditions and I don’t think people are positioned for it after puking their brains out after Liberation Thursday.”
On the energy side, Tony said that’s a tough trade right now. While he wants “some energy exposure no matter what,” he’s “not looking for a trade to materialize.” On oil specifically, he said the price “looks comfortable where it is… there’s no shortage story, no contango trade, no backwardation trade.”
As for Time Horizon and the ‘How‘
Tony is a tactical trader — weeks to months — not a long-term buy-and-holder. He looks for setups with strong momentum, bullish macro context, and relative strength on the charts. But even in that short timeframe, he’s patient. He doesn’t chase breakouts or try to predict every squiggle. He waits for levels to break (like homebuilders > 95) or sectors to show real breadth and confirmation.
And how he plays things tends to be the sector itself: “I pick a sector ETF,” he said. “I don’t like individual stock names at all. I like trading sectors where I feel l have a better understanding of where they fit in the bigger stock mosaic. I don’t like to have too much single stock risk.”
He’s also ruthless about pruning. For Tony (and of course, YMMV), the key isn’t diversification, it’s concentration in the stuff that’s working, and quick exits from the rest. He also doesn’t allow his portfolio to balloon: “How could you possibly have 15 positions with an edge in all of them?”
And Finally… Recession Bros and That Asteroid Problem
TG doesn’t buy the doom. And he definitely doesn’t buy what he calls the “recession bros”:
“I very quietly hate recession bros, because they’re just glass half empty people. I’m seeing the glass is half full because I’m an optimist. We’re looking at the same data. And I usually win in the end.”
And on his “half glass full” side, he has sentiment:
“We’re not at extreme greed yet. I checked CNN Fear & Greed… we’re at 61. That shows me there’s a lot of room for improvement.”
He also doesn’t think concerns around valuations will stop the rally: “I have never seen valuation stop a raging bull market.”
So what could derail this whole setup?
Well, that brings us back to the asteroid.
“You asked me what could derail the market? An asteroid.”
Enjoy,
Maggie
Important Disclaimer: It is crucial to remember that this article is for informational purposes only and should not be considered investment advice. Consult with a qualified financial advisor to assess your risk tolerance, investment goals, and overall financial plan.
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