Momentum Thrusts, Manufacturing Leads, and Bitcoin Reaches Statistical Extremes
Equity momentum is stacking at a pace rarely seen in market history. Multiple independent thrust signals have triggered simultaneously, from consecutive win streaks to broad Nasdaq participation, and the forward stats across all of them skew heavily positive at 12 months. Meanwhile, leading indicators are pointing toward a potential manufacturing expansion that would be the strongest in over two decades. In crypto, Bitcoin is sitting at some of its deepest oversold readings on record, with futures positioning and valuation models converging on the same conclusion: price is statistically cheap. The core question is whether this cluster of signals produces the kind of follow-through the historical data implies, or whether macro risks can override what the stats are saying.
1. Equities: Momentum Thrusts and Seasonal Tailwinds
Rare streak signals with overwhelmingly bullish 12-month track records
S&P 500 (6% Rally in 6 Days From a 6-Month Low)
The S&P 500 rallied 6% in just 6 days off a 6-month low. This setup failed in 2001 and was painful in 2008, but outside of those two cases the results are strong. One year later, the S&P 500 was 95% positive with an average return of +21%.
S&P 500 (10-Day Momentum Thrust)
Since 1950, there have been 20 cases where the stock market rallied this much in 10 days. These momentum thrusts have been reliably bullish. One year later: average return of +17.61%, median return of +20.40%.
S&P 500 (7-Day Win Streak)
The S&P 500 posted a 7-day win streak. Over the past 20 years, similar streaks have been higher 19 of 20 times one year later, a 95% hit rate with an average return of +18%.
S&P 500 (Back-to-Back Weekly Gains of 3%+)
The S&P 500 posted back-to-back weeks of +3% or more. Historically, 1 year later the index was positive 86% of the time with an average return of +14%.
S&P 500 (April Seasonal Strength)
Over the past 20 years, April has been positive 80% of the time for the S&P 500, tied with July as the most likely month to finish green.
S&P 500 (Presidential Year 6 Seasonality)
Year six of a president’s term has never finished lower going back to the 1950s. The S&P 500 was 100% positive with an average return of +20% at year-end in these periods.
Nasdaq 100 (11 Consecutive Up Days)
The Nasdaq 100 closed higher for 11 consecutive sessions. Similar streaks of sustained momentum have seen the index finish higher 100% of the time 1 year later, with an average gain of +26% and an average maximum loss along the way of just -8%.
Nasdaq / Bitcoin (Breadth Thrust: 60%+ Advance Rate on 6+ Days)
Over the past 2 weeks, at least 60% of Nasdaq stocks advanced on 6 or more separate days, a rare display of broad participation. This has occurred 17 times in history. Twelve months later: average return of +32%, hit rate 100%. For Bitcoin across 11 occurrences: average return of +153%, hit rate 91%.
Section 1 Summary
The equity signal stack this week is unusually dense. Six independent thrust and momentum signals all point to strong 12-month forward returns, with hit rates ranging from 86% to 100%. Seasonal patterns add further tailwind. The primary caveat is that momentum thrusts, by definition, trigger after sharp moves, meaning some near-term mean reversion is possible even if the 12-month outlook is overwhelmingly positive.
2. Macro & Leading Indicators: Manufacturing, Sentiment, and the Copper/Gold Ratio
Cross-asset confirmation signals pointing toward economic expansion
Semiconductors / Manufacturing PMI ($SOX as PMI Lead Indicator)
The semiconductor sector ($SOX) has rallied +150% YoY, the strongest 1-year increase since the 2000 Dot-Com Bubble, surpassing even the +100% pandemic recovery surge. $SOX has also closed higher for 18 consecutive sessions, the longest streak in history, breaking the previous record of 15 days set in 2014. Historically, semiconductor performance has been a leading indicator for the ISM Manufacturing PMI. If the relationship holds, the Manufacturing PMI could surge to as high as 60 points, the highest since 2021 and, excluding that year, the highest in 22 years.
US PMI (Citi Earnings Revisions Index — 2-Month Lead)
I was able to incorporate the latest US PMI reading published on May 1 and happy to report this is still in expansion territory despite all The US Citi Earnings Revisions Index, which leads PMI by approximately 2 months, remains elevated with no signs of rolling over. This suggests the current risk-asset environment still has room to run in the near term.
US PMI (Global M2 YoY % Change — 5-Month Lead)
Global M2 year-over-year growth, which leads PMI by approximately 5 months, is still elevated but showing a slight dip past July 2026. The current reading supports continued risk-asset strength through mid-year, with the first potential headwind appearing later in the summer. No forward return stats; leading indicator context only.
US PMI (% of Central Banks Cutting Rates — 11-Month Lead)
The percentage of global central banks in a cutting cycle, which leads PMI by approximately 11 months, still shows a majority cutting. This is historically bullish for risk assets. The indicator is showing early signs of potentially rolling over toward the end of 2026, suggesting room for risk assets to run through the rest of this year before the policy tailwind fades.
S&P 500 / Crude Oil (Oil % Deviation From Trend)
This indicator measures crude oil’s percent deviation from its long-term trend. When oil reaches +50% or more above trend, major corrections in the S&P 500 and risk assets have historically followed, with S&P 500 12-month forward returns of -7.2% (Nov 1999), -35.5% (Dec 2008), and -6.5% (Feb 2022) after the threshold was breached. The indicator became more reliable as a top signal from 1999 onward. Conversely, when oil falls -75% or more below trend, major rallies follow.
For Bitcoin, there is only one instance where oil exceeded the +50% threshold: February 2022. Bitcoin’s 12-month forward return from that date was -46.4%, consistent with the bearish signal the indicator gave equities.
The current reading is 39.3% above trend with a status of “Elevated” but still below the 50% danger zone. In the four prior cases where oil was elevated but topped below the 50% threshold — September 1996, September 2004, March 2011, and May 2018 — oil eventually rolled over and risk assets rallied. The S&P 500 12-month forward returns in those cases were +38.8%, +9.7%, +6.5%, and +5.7% respectively, positive in all four instances. A sustained end to the Iran War would be a major tailwind for risk assets as history suggests.
S&P 500 / Consumer Confidence (U of Michigan Sentiment Record Low)
The University of Michigan Consumer Confidence index plunged to a record low of 47.6%. Extreme pessimism in this reading has historically been contrarian bullish. The last time sentiment hit comparable levels, the S&P 500 was 100% positive 1 year later with a median return of +18%.
S&P 500 / Copper-Gold Ratio (Bottom Confirmation Signal)
Every major SPY bottom since 2011 has been confirmed by the Copper/Gold ratio. Across 7 drawdowns over 14 years, the CG ratio bottomed the same day as SPY or lagged by 10-29 days in 86% of cases. It has never once led the equity bottom. The most recent 52-week low in the ratio was March 3, 2026, now 22 trading days ago with a successful retest on March 18. Average forward return after confirmation: +18.7% at 3 months, +24.9% at 6 months, 100% win rate.
Section 2 Summary
The macro picture is reinforcing the equity thrust signals from a different angle. Semiconductors as a PMI lead suggest manufacturing may be approaching its strongest expansion in over two decades. Three PMI lead indicators from Altcoin Screener, spanning earnings revisions (2-month lead), global M2 (5-month lead), and central bank cutting cycles (11-month lead), all remain supportive with no imminent rollover, though the M2 and rate-cutting leads hint at potential softening in the second half of 2026. The oil deviation indicator adds another layer: oil is elevated but hasn’t reached the historically destructive +50% threshold, and all four prior cases where oil topped below that level saw positive S&P 500 returns over the following year. Record-low consumer sentiment is historically a contrarian buy signal with a perfect track record. And the Copper/Gold ratio, which has confirmed every major SPY bottom since 2011, appears to be flashing confirmation again. These are independent data points converging on the same conclusion.
3. Bitcoin: Generational Oversold Readings and Positioning Extremes
Multiple valuation and positioning models pointing to statistical cheapness
Bitcoin (Power Law Z-Score at -0.93σ)
Bitcoin’s power law z-score dropped to -0.93σ. A backtest of every prior occurrence at this level shows a median 12-month forward return of +631%, a worst-case 12-month return of +82%, and a win rate of 100% across 7 out of 7 episodes.
Bitcoin (Shorting Premium at 3 Standard Deviations)
Historical premiums being paid to short BTC at $78k are sitting at 3 standard deviations away from the mean, an extreme level of bearish conviction in the derivatives market that has historically been unsustainable.
Bitcoin (Mean Reversion: $40k Would Be a 0.4% Event)
For bears targeting $40k, the mean reversion math is sobering. Averaged across nine anchors (technical, on-chain, trend, fast, slow), a move to $40k would be a 0.4% event, rarer than $2 Bitcoin in 2011.
Bitcoin Futures (Large Speculators Record Net-Long + Non-Commercials Adding With Urgency)
Three independent analysts are flagging the same positioning extreme. Large Speculators are at a record net-long position in Bitcoin futures, breaking the previous record from September 2023 before Bitcoin rallied. Separately, Tom McClellan notes that non-commercial futures traders, whom he considers the smart money in Bitcoin, keep adding to net longs even as prices chop sideways. He frames this as a compound fulcrum structure and a major bottoming indication. Historically, this kind of extreme net-long positioning by large speculators has aligned with Bitcoin bottoms.
Bitcoin (Blood Moon Cycle: 4 for 4)
The blood moon cycle has marked peak euphoria near the first blood moon and peak fear near the last blood moon of each cluster, with a 100% hit rate across 4 cycles. The latest cluster: March 2025 (macro range highs at $108k), September 2025, and March 2026 (current swing lows at $60k). The next blood moon is July 2028, implying 24 months of uptrend if the pattern holds. Current price action is aligning: macro downtrend broken, range reclaimed, daily structure turning bullish. This is a non-traditional framework with an extremely small sample size.
Section 3 Summary
Bitcoin’s oversold readings are clustering across independent frameworks: power law z-scores, short premiums, mean reversion models, and futures positioning all point to statistical cheapness. The power law z-score carries the strongest quantified edge with a 100% win rate and +631% median return at 12 months. The positioning data from three separate analysts converging on the same extreme adds weight. The blood moon framework offers an interesting analog but relies on just 4 observations. The main risk is that statistically cheap can get cheaper in the short term, even when 12-month odds are overwhelmingly positive.
Closing Summary
This week’s signal density is exceptional. In equities, six independent momentum thrust signals triggered with 12-month hit rates between 86% and 100%, backed by macro leads from semiconductors, contrarian sentiment readings, and the Copper/Gold confirmation model. Three PMI lead indicators spanning different time horizons all remain supportive, though the M2 and central bank rate-cutting leads hint at potential softening in the second half of 2026. The oil deviation indicator adds a useful risk framework: oil is elevated at 39.3% above trend but hasn’t reached the +50% threshold that historically preceded major drawdowns in both equities and Bitcoin. All four prior cases where oil topped below that level saw positive S&P 500 forward returns. In Bitcoin, the convergence is striking: power law z-scores, derivatives premiums, mean reversion analysis, and record futures positioning are all flagging generational cheapness simultaneously. The weight of evidence is heavily skewed toward higher prices at 12 months across both asset classes. The primary risk remains timing: sharp recoveries from deep oversold conditions can still involve near-term volatility and retests before the full forward returns materialize, and the oil deviation indicator warrants monitoring as the one signal that could shift the macro backdrop if crude pushes meaningfully higher from here.
Indicator Summary Table
| Instrument | Indicator Name | Insight | Source Link |
|---|---|---|---|
| Bitcoin | Blood moon cycle | 100% hit rate across 4 cycles; small sample; non-traditional framework | Source Link |
| Bitcoin | Mean reversion ($40k scenario) | $40k would be a 0.4% event across 9 anchors; rarer than $2 BTC in 2011 | Source Link |
| Bitcoin | Power law z-score at -0.93σ | 100% win rate (7/7); median 12M return +631%; worst case +82% | Source Link |
| Bitcoin | Shorting premium at 3σ from mean | Extreme short premium at $78k; historically unsustainable (no forward stats provided) | Source Link |
| Bitcoin Futures | Large Specs record net-long + non-commercials adding with urgency | Record positioning; aligned with prior bottoms (Sep 2023); compound fulcrum structure | Source Link · Source Link · Source Link |
| Nasdaq 100 | 11 consecutive up days | 100% positive 1Y later; +26% avg; max loss -8% | Source Link |
| Nasdaq / Bitcoin | Breadth thrust (60%+ advance rate on 6+ days) | Nasdaq: 100% positive 1Y, +32% avg (17 occurrences). Bitcoin: 91% positive 1Y, +153% avg (11 occurrences) | Source Link |
| S&P 500 | 10-day momentum thrust | 20 cases since 1950; avg +17.61%, median +20.40% 1Y later | Source Link |
| S&P 500 | 6% rally in 6 days from 6-month low | 95% positive 1Y later; +21% avg (failed 2001, 2008) | Source Link |
| S&P 500 | 7-day win streak | 95% positive 1Y later; +18% avg (19 of 20 years) | Source Link |
| S&P 500 | April seasonal strength | 80% positive over past 20 years; tied with July for best month | Source Link |
| S&P 500 | Back-to-back weekly gains of 3%+ | 86% positive 1Y later; +14% avg | Source Link |
| S&P 500 | Presidential Year 6 seasonality | 100% positive since 1950s; +20% avg | Source Link |
| S&P 500 / Consumer Confidence | U of Michigan sentiment record low (47.6%) | 100% positive 1Y later; +18% median return | Source Link |
| S&P 500 / Copper-Gold Ratio | Bottom confirmation signal | 86% confirmation rate (6/7); +18.7% at 3M, +24.9% at 6M; 100% win rate | Source Link |
| S&P 500 / Crude Oil | Oil % deviation from trend | Currently +39.3% (elevated, below +50% danger zone). Above +50%: -7.2%, -35.5%, -6.5% 12M returns. Below threshold analogs (1996, 2004, 2011, 2018): +38.8%, +9.7%, +6.5%, +5.7% 12M returns. 4/4 positive. | Chart only (Altcoin Screener) |
| Semiconductors / Manufacturing PMI | $SOX as PMI lead indicator | $SOX +150% YoY; 18 consecutive up days (record); PMI implied at 60, highest in 22 years ex-2021 | Source Link |
| US PMI | % of central banks cutting rates (11-month lead) | Majority still cutting; potential rollover end of 2026 | Chart only (Altcoin Screener) |
| US PMI | Citi Earnings Revisions Index (2-month lead) | Still elevated, no rollover; supports near-term risk-on | Chart only (Altcoin Screener) |
| US PMI | Global M2 YoY % change (5-month lead) | Still elevated; slight dip past Jul 2026 | Chart only (Altcoin Screener) |
Large Caps
Due to a technical issue with access to the altcoin performance data, I won’t be able to publish it with this newsletter. I will try to resolve it as soon as I can but it might have to wait until the next newsletter. Apologies for any inconvenience.
Bitcoin Update
Not much has changed for Bitcoin since the last newsletter. It’s toward the top of the range. If it can reclaim $80,000 on the weekly timeframe, it would be progress towards forming a low. Then the next thing to look for is Bitcoin to go above $100,000 to form a higher high. Even if Bitcoin still is stuck below $80,000, there’s a very high chance that Bitcoin holds above this green area of $50,000 to $72,000. Based on the evidence looking at Bitcoin’s price action along with other asset behavior and the macro backdrop, this is most likely a mid-cycle bear market similar to March 2020 and April 2021 when Bitcoin and crypto had similar +50% drops but still managed to make new all-time highs.
Ethereum Update
Ethereum is in a similar situation of being at the top of its range. I would like to see it reclaim $2700 to confirm any continued upside.
Solana Update
Solana is in a similar situation but instead is in the middle of the range. I want to see it reclaim $120 on the weekly timeframe to flip bullish.
Sui Update
Sui is going sideways between 0.80-1.00. I would like to see it get above $1.40 to flip bullish.
Dogecoin Update
Dogecoin is continuing to hold $0.09 as critical support and is near the top of the range. I think there’s a strong chance it continues to hold this and I would like to see it reclaim $0.12 to see any bullish continuation.
Pepe Update
Pepe is still managing to hold above its bottom range for now but if it loses this then I expect a major drop from here.
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