TMAD Flow: Market Sentiment Update

Hello Traders,

Geopolitical headlines are keeping stocks stuck in a range as investors pivot to earnings season, where growth is still expected to be strong. Most people remain optimistic that President Trump can resolve the war with Iran quickly—especially as oil prices approach $120, a level that usually triggers a TACO to cool the market.

TAIL RISK INDEX

The tail risk index (TDEX) is a measure to understand the cost of protection against a possible crash as it shows the implied volatility of far OTM puts of SPX. Currently is heading lower giving us a confirmation of complacency which means traders & investors remain long positioned while hedged. The divergence in TDEX vs QQQ shows how the market is still betting on a TACO, while Iran continues to deny any peaceful resolution.

RISKS AHEAD