# Your Macro Framework Is Missing the Strongest Signal in the Market w/ Caleb Franzen

Source: https://www.youtube.com/watch?v=ZLGYlmKMYYA
Recap page: https://rapidrecap.app/video/ZLGYlmKMYYA
Generated: 2026-01-20T16:10:58.58+00:00

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## Quick Overview

Caleb Franzen asserts that the current stock market uptrend remains firm, supported by strong forward 12-month earnings and revenue growth across sectors, while Bitcoin is currently acting as a speculative risk-on instrument that is struggling relative to broad equities due to a broader decline in risk appetite, specifically noting that Bitcoin's trend has shifted bearishly by breaking below its 400-day moving average cloud.

**Key Points:**
- The S&P 500 is in a very firm uptrend, supported by forward 12-month earnings making new all-time highs, which aligns with the market being a forward-looking pricing mechanism.
- Revenue growth across S&P 500 sectors, such as Information Technology growing revenue at 18% year-over-year, justifies valuation increases, confirming that consumers and businesses are spending.
- The softening labor market, evidenced by the unemployment rate rising to 4.4% (a normalization from 3.4%), has given the Fed room to cut rates, which equities are pricing in, causing the S&P 500 and unemployment rate to rise in synchrony.
- Bitcoin has objectively shifted its trend to bearish because it fell below the 2-day 200 moving average cloud (around $97,000 in early November), confirming a trend shift that occurred in mid-2022.
- Bitcoin currently acts as a speculative risk-on instrument, moving in lockstep with speculative software stocks (like IGV) and ARK (ARCW), rather than functioning as digital gold right now.
- Caleb Franzen's line in the sand for flipping bullish on Bitcoin again is a confirmed break above $101,000, which would reclaim the 2-day 200 moving average cloud as support.
- Retail stocks are trading at all-time highs, indicating solid risk-on dynamics, especially as they outperform consumer staple stocks.

**Context:** The host John Gill interviews market strategist and analyst Caleb Franzen, founder of Cubic Analytics, on the Milk Road Macro podcast to discuss current market dynamics, contrasting strong equity performance with weak investor and consumer sentiment, and analyzing divergences between US and global liquidity, particularly focusing on the recent behavior of Bitcoin relative to broader stock indices.

## Detailed Analysis

Caleb Franzen maintains that the equity market, specifically the S&P 500, is in a strong uptrend, supported by objective data showing forward 12-month earnings and revenue growth making new all-time highs, citing 18% year-over-year revenue growth in Information Technology as evidence of fundamental strength. He emphasizes that the stock market is not the economy, but rather reflects future expectations, and the current resilience in real GDP growth (forecasted at 5.3% for Q4 by the Atlanta Fed) and industrial production confirms investors' positive outlook. Franzen highlights a key signal: the unemployment rate's rise is merely a normalization, providing the Fed room to cut rates, which the market prices in, causing the unemployment rate and S&P 500 to move in synchrony. Regarding Bitcoin, Franzen argues it is currently behaving as a speculative risk-on asset, not digital gold, evidenced by its correlation with struggling speculative growth stocks like ARCW and IGV, contrasting sharply with the leading equity indices. He established a bearish stance on Bitcoin after it broke below its critical 400-day moving average cloud (around $97,000), mirroring past bear market confirmations; he will only turn bullish again if price decisively breaks above $101,000. Finally, Franzen notes that while US liquidity is at all-time highs, global M2 (US, Japan, Canada, EU, UK) has been sideways for nine months, which may explain Bitcoin's weakness relative to US equities, and he suggests portfolio maintenance over aggressive allocation shifts in equities for 2026, though he plans to buy Bitcoin at both higher breakouts ($101k) and lower support retests (mid-$75,000 range).

### Equity Market Health

- S&P 500 remains in a firm uptrend
- Support comes from forward 12-month earnings making new all-time highs
- Revenue growth in sectors like IT (18% YoY) justifies valuations

### Labor Market & Fed Policy

- Unemployment normalization grants the Fed room to cut rates
- The S&P 500 and unemployment rate rise in synchrony as markets price in future liquidity
- Industrial production growing 2% YoY is consistent with historical bull markets

### Bitcoin Trend Analysis

- Bitcoin trend shifted bearishly upon breaking the 2-day 200 moving average cloud (around $97k) in November
- Bitcoin correlates with speculative risk-on assets like ARCW, not gold
- Confirmation of a new bull run requires a sustained break above $101,000

### Risk Appetite & Speculation

- Speculation has followed momentum, shifting from Bitcoin/tech to precious metals like gold and silver
- Retail stocks trading at all-time highs show solid risk-on dynamics in equities
- Software and speculative growth stocks are struggling relative to index performance

### Global Liquidity Context

- US M2 liquidity is at all-time highs and accelerating
- Global M2 (US, Japan, Canada, EU, UK) has been trading sideways for about nine months
- Bitcoin, as a global asset, is more sensitive to global liquidity than US-centric equities