# Ignore the Headlines. The Charts Are Screaming Bull Market w/ Caleb Franzen

Source: https://www.youtube.com/watch?v=mD_77ZeCtZ4
Recap page: https://rapidrecap.app/video/mD_77ZeCtZ4
Generated: 2025-10-21T15:02:34.705+00:00

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## Quick Overview

Caleb Franzen asserts that investors should remain bullish and continue allocating capital to risk assets like Bitcoin and technology stocks, despite recent pullbacks, because the underlying macro environment, characterized by low corporate bond spreads and decelerating M2 growth, historically supports an uptrend, making current dips opportunities to buy before the market inevitably sets new all-time highs.

**Key Points:**
- Caleb Franzen maintains a bullish stance, advising investors to exploit pullbacks by allocating capital to risk assets like technology stocks and Bitcoin.
- Historical analysis shows that prior instances of low corporate bond spreads (e.g., BAMLCOA0CM chart) and decelerating M2 growth preceded bull markets, suggesting current conditions support continued uptrends.
- The technology sector (Magnificent Seven) and Bitcoin are showing exceptional strength, making new all-time highs even as broader market sentiment wavers.
- Franzen emphasizes that true bull market confirmation comes from sustained production of higher highs and higher lows, which is currently present across major indices.
- The Chicago Fed's National Financial Conditions Index making new multi-year lows confirms financial conditions are generally supportive of risk-taking.
- The current environment favors risk-on assets, evidenced by High Beta outperforming Low Volatility, contradicting typical bear market behavior.
- Investors should focus on controlling their emotional reactions (fear/greed) rather than trying to perfectly time macro events like Fed policy shifts or geopolitical tweets.

![Screenshot at 02:08: Caleb Franzen displays a chart comparing Bitcoin Market Cap \(LHS, orange line\) against USD-Adjusted M2 for the US, Japan, Canada, EU, and UK \(RHS, green line\), showing a strong correlation that suggests Bitcoin's rally is supported by global liquidity growth, even during recent pullbacks.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-02-08.png)

**Context:** This is an interview between John Gillen of Milk Road Macro and financial analyst Caleb Franzen, founder of Cubic Analytics. The discussion centers on current market conditions, particularly focusing on whether the recent pullback in risk assets like stocks and Bitcoin signals a shift into a bear market or if the underlying bullish macro trends remain intact. Franzen uses several charts to illustrate his points, comparing Bitcoin's market cap to global M2 growth and examining financial conditions indices and bond spreads to support his optimistic outlook for risk assets.

## Detailed Analysis

Caleb Franzen argues strongly for maintaining a risk-on allocation, specifically favoring technology stocks and Bitcoin, despite recent market uncertainty. He points to several charts to support his bullish thesis. First, he shows that the NASDAQ 100 recently printed its highest weekly close ever, indicating underlying strength, even while the US government was shut down, suggesting market resilience independent of political noise. Second, he highlights the relative strength of growth vs. value stocks (VUG/VTV) and High Beta vs. Low Volatility (SPHB/SPLV), both making new all-time highs, which historically occurs during uptrends, not bear markets. He further supports this by referencing the Chicago Fed's National Financial Conditions Index making multi-year lows, signifying easing financial conditions favorable to risk assets. Franzen explicitly compares Bitcoin's market cap to USD-Adjusted M2 across major economies (US, Japan, Canada, EU, UK), showing a strong historical correlation, implying Bitcoin's current rally is backed by global liquidity. He notes that while Bitcoin's volatility index has dropped, this typically accompanies consolidation within a strong bull market, not a reversal. Finally, he points to the yield curve (3M/6M Treasury Yields vs. Fed Funds Rate) where yields are still rising, suggesting the market is pricing in future rate cuts, which historically supports risk assets. Franzen concludes that investors should continue buying dips in these favored assets rather than panicking over short-term volatility or political tweets.

### Market Outlook (Caleb Franzen)

- Concludes the market is in a bull market despite pullbacks; advises investors to exploit dips by adding to risk assets like Bitcoin and tech stocks (e.g., Magnificent Seven).
- Bull market characteristics like High Beta outperforming Low Volatility are present.
- Expects Bitcoin to continue its uptrend, potentially hitting $175k.

### Macro Data Confirmation

- Chicago Fed National Financial Conditions Index making new multi-year lows confirms easing financial conditions are supportive of risk-taking.
- USD-Adjusted M2 growth across major economies correlates strongly with Bitcoin Market Cap, supporting the current rally.

### Interest Rate Expectations

- The yield curve is signaling future rate cuts, which historically favors risk assets and contradicts immediate bearish expectations.
- The market has already priced in cuts, making further Fed dovishness less of a surprise catalyst.

### Investment Strategy

- Focus on what can be controlled (risk management, position sizing) rather than unpredictable macro events like geopolitical news or Fed tweets.
- Advocates for accumulating risk assets during pullbacks, especially given gold's relative underperformance.

![Screenshot at 00:00: Introduction of host John Gillen \(@MilkRoadMacro\) and guest Caleb Franzen \(@calebfranzen\) kicking off the discussion.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-00-00.png)
![Screenshot at 02:08: Chart showing the long-term uptrend of the NASDAQ 100 index with moving averages, illustrating underlying strength.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-02-08.png)
![Screenshot at 02:53: Chart comparing the Industrial Stocks index \(XLI\) against the S&P 500, showing cyclical leadership.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-02-53.png)
![Screenshot at 03:07: Chart comparing Growth \(VUG\) vs. Value \(VTV\) stocks, demonstrating growth outperformance, typical of bull markets.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-03-07.png)
![Screenshot at 03:11: Chart comparing High Beta \(SPHB\) vs. Low Volatility \(SPLV\) stocks, showing High Beta leading, indicative of risk-on sentiment.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-03-11.png)
![Screenshot at 04:50: Chart comparing Bitcoin Market Cap \(LHS, orange\) against USD-Adjusted M2 of major economies \(RHS, green\), showing strong correlation supporting BTC's move.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-04-50.png)
![Screenshot at 05:55: Chart showing the ratio of Small Cap Growth \(IWO\) vs. Small Cap Value \(IWM\), indicating small-cap growth strength, which is typical in bull markets.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-05-55.png)
![Screenshot at 07:40: Dual-pane chart comparing the risk-on/risk-off dynamic: Top pane shows NDX/SPX ratio, bottom pane shows IWO/IWM ratio, both showing positive divergence suggesting risk appetite.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-07-40.png)
![Screenshot at 09:00: Chart displaying the ICE BofA US Corporate Index Option-Adjusted Spread \(BAMLC0A0CM\), which is low, indicating tight credit spreads and low systemic risk.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-09-00.png)
![Screenshot at 21:40: FRED chart showing M2 growth rate year-over-year, highlighting the massive acceleration post-2020 and recent deceleration, which Franzen suggests is still supportive.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-21-40.png)
![Screenshot at 22:02: Chart displaying YoY % change in Commercial Bank Loans and Leases, showing credit growth slowing but remaining positive, indicating continued, albeit cautious, financial expansion.](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-22-02.png)
![Screenshot at 22:15: Chicago Fed National Financial Conditions Index chart, showing conditions making new multi-year lows \(easing\).](https://ss.rapidrecap.app/screens/mD_77ZeCtZ4/00-22-15.png)