Market alert for the S&P 500

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Note: I sent the following market alert to my free mailing list yesterday (April 15th 2026). If you want to receive these timely, actionable insights straight to your inbox, make sure to join the list at the bottom of this page so you don't miss the next one.

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The Alert:

The exceptional rebound we have seen over the last two weeks on the S&P 500 (which I anticipated, even if it slightly exceeded my target) is not built on solid foundations. So, even though the price of the S&P 500 could stagnate or go a bit higher through inertia, a reversal potentially as violent as the move up is the most probable scenario in my view.

To understand why the current situation is precarious despite appearances, we have to look under the hood. This move is not dictated by economic fundamentals, but by a violent mechanical reaction, like a spring being released.

Here are the three key elements to fully understand this phenomenon:

1. Trend Followers (CTAs): These are "robot traders" that follow strict rules. When the market dropped, they sold massively. As soon as the price bounced back, their algorithms forced them to buy back billions of dollars in stock all at once to follow the new trend, acting as an artificial engine for the rally.

2. Dealer Hedging (Gamma Hedging): Large banks act like insurers. When the market was falling, investors bought "insurance policies" (put options). To protect themselves, banks had to bet against the market (shorts). But when the drop stopped, these insurances quickly lost their value. The banks therefore had to cancel their bets by massively buying back shares, which propelled prices even higher.

3. Forced Buying (Short Squeeze): Many investors were betting on the crash continuing. When the market turned around, they lost money quickly. To stop the bleeding, they were forced to buy shares to close their positions. This panic buying created a feedback loop: the more they bought to exit, the higher the price went.

The most important thing to remember is that this move is a matter of forced flows: it is the story of "who had to buy" rather than "who wanted to buy". Once these mechanical buyers (robots, insurers, and short sellers) finish their purchases, the market could find itself without any support.

Nico de Bony

If you found this briefing helpful, feel free to share it. For those ready to build a defensive process, the links to my training are below.

• Watch my Free Masterclass to understand the 5 core hedging strategies.

• Watch the Practical Demo to see me execute these trades live.

• If you want to master this, check out my Self-Paced Course

• or apply for one of the few remaining spots in my 1-on-1 Coaching.