Rebel Capitalist Interviews Sep 21, 2026 1h 8m 54m saved
With Patrick Ceresna, Founder and Chief Derivative Market Strategist at Big Picture Trading
Only 30% of the S&P 500's constituents are trading above their 50-day moving average. The index is near its highs anyway, because seven stocks are 35% of it.
The usual way to start a market review is with the index. Patrick Ceresna refused to, on the grounds that the index is downstream of something else: oil is setting inflation expectations, inflation expectations are setting rates, and rates are what is repricing everything with a yield attached to it.
"So it's not a Jackson Hole thing it's a Straits of Hormuz thing."
Ceresna runs Big Picture Trading, trades alongside paying members there, and built cotsignal.com from scratch to publish the weekly commitment-of-traders positioning data free. Most of the conversation was him walking through charts and the host pushing back on the conclusions.
The full interview is covered here so you can skip it. 68 minutes of audio, 14 minutes of reading.
Here are the 8 charts that matter.
Key Takeaways
Oil is upstream of everything else, which is why he refused to open on the S&P 500
Speculators were washed out of crude in June and never came back — longs are gone and shorts have not been squeezed, which he reads as structurally bullish
Central banks moved together after Jackson Hole, with roughly 75bps priced into US rates and 76bps into the ECB in about a month
He calls that a "spectacular policy error", because monetary tightening cannot manufacture diesel
The 30-year Treasury is the most crowded short on the board, at the seventh percentile of positioning
Only 30% of S&P 500 stocks are above their 50-day average, and the index is being carried by seven names that are 35% of its value
Gold has already had a 25% correction over six months, and he says it is a buy here even if the low is not in
Bitcoin is being accumulated for the first time in about two years, with a measured move toward 100,000 on a breakout
1. Oil Drives Everything
Asked whether he wanted to start with the S&P 500, Ceresna said no, and gave the reason.
The chain he described runs from oil to inflation expectations to rates to equity risk, so the market review starts with the catalyst rather than the symptom.
The host's objection was that oil is not behaving like a market at all right now — it is a derivative of a political feed, so a chart of it tells you less than usual. Ceresna agreed with the diagnosis for the first three months of the conflict, and said that is exactly what the positioning data shows.
He also flagged a chart-reading trap: the November contract looks like it is at all-time highs, while the continuous chart shows crude traded at $120 a barrel at the start of the war.
2. The Great Oil Washout
The tool Ceresna uses for this is the commitment-of-traders report, which requires every futures participant to disclose their position and sorts them into commercial hedgers, large speculators and small speculators.
He explained the value of it in one line: it is a positioning map, not a forecast. His illustration was a crowded room.
Crowded is not the same as bearish, but it is a risk
The risk though is that when you're shoulderto-shoulder in a nightclub and someone yells fire in the nightclub, there's a chance that people are going to get trampled on the way out.
Patrick Ceresna
His live example was copper, at the 100th percentile of speculative long positioning on one-, three- and five-year lookbacks.
Everyone knows the copper story, which is the problem with it
Copper is in a really good bullish state and everyone knows it and so everyone's gone long
Patrick Ceresna
Crude was in the same state going into the war. Every analyst was pointing at depleted inventories and counting tankers, and the market was positioned at a 100th-percentile five-year long for $150 or $200 oil. The host's summary was that the traders drank the Kool-Aid.
Then the administration went to work on the narrative — releasing reserves, negotiating with China to do the same, and putting out a stream of messages that a deal was imminent.
The June washout
We basically had not only the large speculators wipe out like a 100,000 contracts on their long positions.
Patrick Ceresna
At the June and July low, gross short positioning in crude hit a five-year extreme. What Ceresna finds remarkable is what has happened since: crude rallied roughly 60% from trough to peak off around $68, and neither side moved.
Nobody came back and nobody got squeezed
This is one of the most bizarre moments in oil.
Patrick Ceresna
He was explicit that he has no evidence for the manipulation theory and would not make a claim he cannot support. What he will say is what the positioning implies.
A market with no crowd in it has room to run
So, it's actually structurally a much stronger bull market because we have not seen short sellers capitulate and we have not seen the longs actually come back.
Patrick Ceresna
3. No Off-Ramp on Iran
The political read followed from the same chart. The messages that used to move oil have stopped working, and Ceresna's explanation is that there is nothing left to say.
His central claim on the conflict
I would argue that the US now has lost control of the energy and economic war because there is no easy withdrawal option of how to get out of this mess that they've gotten themselves into.
Patrick Ceresna
The only easy exit, he said, would be to let Iran control the region, which is not acceptable to Israel and not something the United States will do after starting the confrontation to prevent exactly that. Meanwhile the cost is political: diesel and oil at these levels going into the midterms, and proposals now being floated to restrict exports of diesel to hold domestic prices down.
The game theory is what makes him pessimistic. Iran's incentive is to keep this running through the election because that is where it hurts most; the administration's incentive to end it disappears the moment the election is past.
The market's odds
That means there's an 82% chance that this is still going full throttle.
Patrick Ceresna
That is prediction-market pricing on the strait being back to normal by the end of December, against "400 million barrels depleted in inventories around the world."
The host's amendment was that the crack spread matters more than the barrel: oil can fall and diesel can stay expensive, because the constraint is refining capacity rather than crude supply. Nobody puts crude in a truck. Ceresna pulled up the Brent crack spread, agreed it is elevated, and used the refiner Valero as the equity expression — a stock on a tear because refining margins are printing money.
4. A Global Hawkish Pivot
The hinge of the conversation is what happened at Jackson Hole, where Warsh delivered a hawkish message and rates repriced hard over the following three weeks.
The message was short and it was enough
So Warsh simply advertised that they're concerned about inflation.
Patrick Ceresna
Roughly 75 basis points, close to a full percentage point, was priced into US rates in September alone — three hikes. The host pushed back that most of the move was at the front of the curve and that the 10-year has moved far less, leaving about 25 basis points between twos and tens. Ceresna did not argue: the curve flattened, and that is the reality.
What he wanted to establish is that this was not a Federal Reserve event.
The ECB repriced by almost the same amount
But you basically had since that August meeting 76 basis points priced in so like three rate hikes by the ECB.
Patrick Ceresna
Which points at the cause
So it's not a Jackson Hole thing it's a Straits of Hormuz thing.
Patrick Ceresna
Jackson Hole, in his phrase, is where all the central bankers happen to be in the same room. The conclusion they reached together is the one he thinks is wrong.
His verdict on the policy
And this is where I think there is going to be spectacular policy error.
Patrick Ceresna
His precedents are the ECB hiking into 2011 and, as the host added, into July 2008 — both times fighting a supply shock with monetary policy.
You cannot tighten your way to more diesel
You can't you can't fight higher oil prices by causing a recession. Well, you can but there has to be genuine demand destruction. You have to literally kill the economy in order to have demand destruction.
Patrick Ceresna
The host's version was blunter: the problem is the supply of diesel, and the response is to cut demand in an economy where demand is already weak.
The tightening has already happened
The thing that people need to understand that are listening is that you don't need Warsh to raise rates anymore. The interest rate markets have now baked all of these rate hikes into the curve.
Patrick Ceresna
Anyone borrowing today is already paying as though every priced hike has occurred. What Ceresna expects next year is the reversal, and he was careful about timing it.
The trade is on the watch list, not on the book
But when it is, it's going to make stupid money.
Patrick Ceresna
5. Nobody Wants the 30-Year
The host raised the 30-year Treasury as the most hated asset he has seen in five years of doing this, and said he is waiting for the chart to make lower lows and lower highs before taking the other side.
His description of the crowd
I have never ever ever seen an asset that's this hated that everyone is short, everyone is bearish.
Rebel Capitalist Interviews
The positioning data supports it. Large speculators are loaded up on the two-year and five-year notes; the long bond sits at the seventh percentile, meaning heavy shorts and very few longs. Net short positioning has been exceeded only once, in the 2023 bear market, and gross shorts are near 2024 levels.
At the other end of the curve, the two-year has seen a substantial pivot over six months, almost all of it short covering rather than new buying.
Ceresna's expectation is that this ends violently.
The squeeze is coming, and being early is expensive
But the problem with this trade is if you're in too early, you're just going to get stuck in the meat grinder for another couple of months.
Patrick Ceresna
What he wants before taking it is not a broken trend line but an event: a macro pivot, a jobs miss, a data point that makes the market decide the Fed has gone too far.
He also floated the scenario the host rejects outright.
The Japanification case
we may still be setting up for a Liz Truss moment
Patrick Ceresna
The host's counter is the relationship between the 10-year and nominal GDP, which he says has held for a century. With nominal GDP at 6.5%, a 10-year at 10% would be an irresistible real yield: sovereign wealth funds, pensions and above all banks would buy it and pull the yield back toward nominal growth. His framing was that this is not rationality, it is greed.
And his objection to the scarcity argument
No, because the banks have an infinite balance sheet, Patrick.
Rebel Capitalist Interviews
Ceresna's reply was that outstanding US debt went from around $800 billion in 1980 to $9 trillion by 2007, before quantitative easing, absorbed by bank balance sheets without incident — which grants the host's mechanism rather than rejecting it. Both settled on a short-term disagreement: the host allows a Liz Truss moment lasting days, Ceresna is describing something over six months to a year.
The host's parting shot was that in each of the three US quantitative-easing programs the 10-year finished higher than it started, because growth and inflation rose. Ceresna's answer was that the trigger is the question, not the consequence: something breaks, the response follows, and the yields come later.
6. Breadth Has Collapsed
Higher rates are repricing everything with a yield. Ceresna ran through corporate bonds, high yield, senior loans and mortgages, and then the equity proxies — consumer staples, telecoms, utilities.
Anything bought for its dividend is being marked down
Anything that's got a big ass dividend is now being repriced to higher yields. The hurdle rate rises and therefore the valuation on all of these things gets repriced.
Patrick Ceresna
Then the breadth chart, which asks one question: how many of the 500 are above their 50-day moving average.
Thirty percent
So, this and this is a percentage. So, we are right now at 30% of stocks bullishly trending above their 50-day moving average.
Patrick Ceresna
Which is the same fact stated the other way
under the hood, 70% of stocks that make up the S&P 500 are actually right now in a downtrend.
Patrick Ceresna
The drag he named is semiconductors. The South Korean index, which he called the epicenter of the AI trade after a move of roughly 300%, has rolled over with Samsung and SK Hynix, and the semiconductor ETF has gone nowhere since its peak.
What is left holding the index up is the same seven names.
Seven stocks, 35% of the market capitalization
They're just so big, these hypers scalers that the rest of the 497 stocks that make up are the other 60%.
Patrick Ceresna
The host's objection was that when leadership tires, money rotates rather than leaves, so the index holds. Ceresna's answer was that the rotation happened under a different interest-rate backdrop.
What he wants viewers to watch
I'm telling you, the MAG7s are going to decide if there's going to be a selloff before the midterms or not.
Patrick Ceresna
The S&P is sitting in what he called a bull flag on the 50-day, which could resolve upward. His caveat is that the index does not reach 8,000 into the midterms without those seven names doing the lifting, and that a double top there — which he was explicit he is not forecasting — is a different situation entirely.
7. Gold's False Start?
Gold he called the most interesting chart on the board. A two-year advance ended in a parabolic blow-off, followed by a six-month correction of 25% peak to trough.
The breakout that followed, in gold and bitcoin together, came when the Treasury announced a buyback operation the market read as officials blinking on rates. Ceresna's point is that the Fed did not confirm it.
The real-asset trade needs the tightening to stop
the whole real asset story is really about the transition moment when central banks stop tightening and start accommodating
Patrick Ceresna
His analogy for where gold is now is the start of a race.
The gun has gone off; the question is whether it was a false start
So what we had was a breakout. The starting gun got shot. And what we're now trying to do is piece together the evidence as to whether this is actually turning into the beginning of a new bull run or whether it was a false start.
Patrick Ceresna
Gold has reversed and is holding above its 50-day while still below its 200-day, which he calls the first sign of a move from distribution to accumulation rather than proof of one. He allowed for 10% to 15% of further volatility, a retest of 4,000, possibly 3,800, and an inverted head-and-shoulders that makes a lower low before the real advance.
His conclusion anyway
Overall, gold is a buy here.
Patrick Ceresna
What he does not know is whether the buy is now or in the fourth quarter.
8. Bitcoin Changes Hands
Bitcoin's chart, he said, was a chart of death until the same reversal point — and he had been positioned for a washout that margin-called the largest corporate holder.
Unlike gold, bitcoin is above its 200-day and its consolidation is shallow.
The level and the target
80,000. 81,000. And that the measured move is all the way up towards even 100,000.
Patrick Ceresna
A breakout to new highs gives about 20% of room, on his reading. He was clear about what would invalidate it: a break to a fresh high followed by a slide back to 75,000 within three days is a failure to follow through, and you still have to act on a signal at some point.
What has changed underneath
this is the first time in a long time that the ball the ball is now in the Bulls possession and they have the chance to make yards
Patrick Ceresna
His football framing is that one side has possession. For about two years bitcoin was being distributed; for the last month it has been accumulated.
Bonus Insights
On liquidity sweeps, he took the unglamorous explanation
Asked whether engineered washouts are real, Ceresna said the mechanism is ordinary: leveraged longs get force-liquidated, which creates pockets of liquidity and short, sharp reversals. He declined to go further into market manipulation.
His favorite pattern is the two-steps-forward market
He described an AB-equals-CD shape — two steps forward, a pause, one step back, then forward again — and said a market moving in that rhythm is the easiest to build asymmetric trades around.
He built cotsignal.com and gives it away
The positioning data the whole interview runs on is published free at cotsignal.com, with an optional weekly email, and he publishes a weekly video walkthrough of the largest changes on his own channel.
The host's $15,000 lesson in futures contracts
He had a spread on — long the two-year, short the 10-year, equally weighted — and did not know his broker liquidates positions about two weeks before expiry, and on different dates for different contracts. The two-year leg was closed, the 10-year leg was not, and he was net short rates for a week without knowing it.
Ceresna's fix for that
This is what ChatGPT is great for. When you get these trades, just get the ChatGPT to tell you, so when's the last trading day? When is this roll?
Patrick Ceresna
Futures are not equities, he said, and the contract is the thing you have to understand.
Ceresna's bottom line is that the whole market is currently one trade: oil sets inflation, inflation has put every central bank on a tightening path he thinks is a mistake, and the assets to own are the ones that pay when that mistake is admitted.
Products, Companies & Tools Mentioned
Big Picture Trading (Ceresna's membership service, where he trades with paying members)
COT Signal (The free commitment-of-traders positioning site he built from scratch, and the source of most of the charts in the interview)
Valero (The refiner he uses as the equity expression of blown-out crack spreads)
Samsung and SK Hynix (The South Korean semiconductor names whose rollover he calls the start of a possible bear market there)
TLT (The long-Treasury ETF chart pulled up while discussing the record short position in the 30-year)
ChatGPT (His recommended way to check contract roll and last trading dates before putting on a futures trade)
Interactive Brokers (The broker whose early liquidation rules cost the host $15,000 on a curve spread)
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