Coiled Spring Capital MW Report 2/19/25

The Fed minutes came and went with little in the way of new revelations. Officials reiterated their readiness to keep interest rates elevated amid persistent inflation and uncertainty surrounding Trump’s policy direction. There was also interest in maintaining a restrictive stance if inflation remains stubborn. After the release, the rate complex eased slightly, with Fed Fund Futures inching higher—likely in response to renewed discussions about pausing QT.

The SPX has been steadily climbing since the weekend and is now trading at a new all-time high, just as we anticipated in our 2/17 report. This marks the index’s third record close of 2025. All-time highs are inherently bullish—especially when achieved despite prevailing uncertainty.

Stock market breadth continues to expand, making a broad-based decline less likely—when more stocks are rising than falling, the math simply favors the upside.

The equal-weight Nasdaq 100 (NDXE) has been the standout performer in February, defying expectations and leaving skeptics scrambling. As we highlighted in our 2/9 report, the NDXE was on the cusp of a breakout—an undeniably bullish signal for those betting against the market. The question is, did they pay attention?

Year to date, the major indexes have delivered solid low single-digit gains, while relentless, logic-defying rallies are compelling the under-positioned to chase the market at increasingly higher prices.

Every major index group is contributing to the rally, with financials leading the charge, while technology and consumer discretionary lag behind.

So, what’s not to like?

As we always say: “Markets don’t move in a straight line.” Despite the strong index trajectory, there have been some underlying momentum breaches. Sometimes, these breaches are just noise; other times, they serve as early warnings of a potential risk-off move.

Which raises the question—Are there monsters lurking under the bed?

Let’s review.

Subscribe to Premium to read the rest.