It's January 5th, the first Sunday of the year. That means it's time to talk about (A) our 2025 market forecast and (B) our ambitions for the year. Let's not tarry! We begin with the...

What an absurdity, making a 1-year forecast. The only forecasts we make that actually [sometimes] work are on something like a 1-day to 2-week timeframe. So what do we think we're doing here?

Anyway, what we think matters for 2025 is that there's a juxtaposition of beliefs which are somewhat—but not entirely—orthogonal to one another: The one belief is that a "Trump presidency," and everything that comes with it, is "good for business" and "good for the Dow Jones," and that just a whiff of de-regulation will unlock heretofore unseen productivity and stuff like that. 'Murica! The other belief is that a "Trump presidency" is pure chaos, and the only thing that will be unlocked is a Pandora's Box of fraud and cronyism and weird tweets and mismanagement and that a mess will be made.

In terms of the market, the one view boils down to, "I think stocks will go up," and the other to, "I think the market will be volatile and unpredictable." Fortunately, both of these can be true. Everyone can win. And we're inclined, ceteris paribus, to bet on this. There's nothing wrong with being long vega and long delta at the same time, and the degree to which you lean on one or the other can shift day-to-day or week-to-week.

For our part, we believe in the "disintermediation of the media," and that this is a wild meta-risk-factor, since nobody seems to agree on basic facts about news anymore—and Trump's re-election stamped and sealed this. Objective truth is for the naive. "Fake news" is everything.

Taken together, it looks like it'd be a good year to carry long vega. To be "long vol." We like that, of course, because it sounds like fun. But there's one other thing, quite related, that will keep our attention, and that's bonds.

This was from October of 2023. Nothing has changed since then. We are still patiently waiting. We are still watching the CFTC's CoT data on Ultras and Bond futures. We are still watching the TLT option flows, waiting for chunks of negative delta to show up. We are still watching the momentum on bonds, waiting for the opportunity to draft with them. And, as of a few weeks ago, we're now watching oil price, because as we learned from the k-scope, there's a strong relationship between USO's price-performance and TLT's forecast.

The nice thing about having ambitions is that you allow yourself to consider the possibilities whereby you can improve things. The not-nice thing is that, in so doing, you automatically begin to hold yourself accountable for attempting those things.

There are so many things to address: We want our documentation page to "catch up" to all of the complexity that we've just introduced vis-a-vis the Kaleidoscope, and we may want something of a "guide" to accompany it. But it's hard to do that, since the k-scope is itself in need of a great many improvements before it can be considered more than a "beta" feature. And more than just improvements to existing functionality, there are a few things we already know we want to add or to make possible. But then, as is usually the case, we don't just want to build a nice, polished product if all of the shininess is superfluous to the ultimate goal of making money with the tool—so all the while, we're going to continue to make trades with it and make sure we address all of the important pain-points with respect to actually placing trades.

All of this pretty much has to be done incrementally, and at the same time. But by the end of it, we'd like to see a functional tool that makes it really easy to do the important things—analyze single-name trade opportunities interactively in multiple dimensions.

Two things we already know we want to work a lot on to this end: (1) correlations and (2) option prices / IVs. We want to see both of these on the k-scope with ease. We're already getting there with (1), but (2) will be a different beast.

In both of these cases, a lot of improvements are going to have to be focused on stuff that's upstream and downstream of the tool itself. The Research page needs to be updated not only to present objectively better opportunities, but also to show us stuff about correlations, which play an important role in trade selection. The Chart page will probably also need to be updated, so as to be usable as more of a companion to the k-scope (which supersedes it in utility).