Investors are still aggressively dip buying, says Interactive Brokers' Steve Sosnick

Summary

• Market internals indicate a persistent underlying bid and FOMO, with investors reluctant to miss rallies.
• Modeled oil price shock from Strait of Hormuz closure ($150-200/barrel, 10% S&P correction) has not occurred, reducing immediate downside risk.
• Investors are conditioned to aggressively buy dips, reinforced by past events like tariff reversals, viewing every pullback as an opportunity.
• Micron (MU) was the most active stock on Interactive Brokers' platform after a post-earnings pullback, showing strong dip-buying interest.
• VOO (Vanguard S&P 500 ETF) is being actively bought by investors, suggesting longer-term confidence in the broad market, while SPY is preferred by traders.
• The "Trump put" concept implies market expectations of intervention, with perceived strike prices around S&P 6500 or 10-year yield 4.45%, often linked to bond reactions.
• Current supply chain disruptions (oil, LNG, fertilizer, helium for semiconductors) are more complex and lasting than tariffs, posing embedded inflation risks if prolonged.
• Quick resolution might lead to transitory inflation, but longer duration could cause permanent price pressures.
• Retail investors risk being caught offside if energy impacts persist, leading to broader market issues.