All‑Time Highs by May? How to Position Your Cash Now
After geopolitical turmoil sent markets reeling, Eddie Gabor is calling for a decisive shift: deploy cash and prepare for all-time highs by May. His thesis rests on three pillars — technical signals that fear has peaked, a rotation into economically sensitive sectors that have lagged, and a conviction that inflation and oil will stabilize in the coming months. But can a market already pricing in optimism justify double-digit returns when war risks remain and tech valuations have compressed? The tension between near-term volatility and medium-term conviction defines the current opportunity set.
Key Takeaways
Deploy cash now and buy any 2–3% pullbacks; market structure has changed post-Covid, and technicals signal a return to risk-on sentiment as geopolitical fears ease.
Overweight small caps and industrials; economically sensitive sectors will outperform the S&P 500 as the economy accelerates and the Fed begins cutting rates this summer.
Software is the most hated area in tech, down 20–25% year-to-date, and now represents a contrarian opportunity for those willing to scale in via ETFs like IGV.
Inflation will spike again next month due to elevated oil, but the market is looking through the data and pricing in stabilization and deceleration by May.
Replace bonds with gold for safety; gold is the best defensive play in a portfolio as geopolitical risks persist and liquidity increases.
In a Nutshell
Buy the dips, rotate into small caps and software, and expect the S&P 500 to hit all-time highs by May — unless geopolitical escalation sends oil to new highs and breaks the inflation story.
The Case for Deploying Cash Now
Technicals signal risk-on sentiment and geopolitical fears are easing.
Eddie Gabor argues that market structure has fundamentally changed since Covid, moving faster and driven more by flows and technicals than fundamentals alone. Markets are forward-looking, and current price action suggests that over the next two months, geopolitical tensions will cool, oil will stabilize, and inflation will trend down. This creates a window for investors who raised cash before the recent drop to redeploy aggressively.
Gabor's firm bought the dip yesterday morning when markets were down, and plans to continue scaling in over the next few weeks. The conviction is clear: the S&P 500 will reach all-time highs sometime in May. For those sitting on cash, the message is simple — buy the fear, respect the technicals, and position for a broadening rally that extends beyond mega-cap tech.
The playbook mirrors the start of the year: overweight economically sensitive areas. Small caps top the list, having had a strong start before the recent attacks and now recalibrating with strong momentum. Industrials follow, along with a contrarian bet on software, the most hated corner of tech. Financials also merit attention as the economy picks up and the Fed potentially cuts rates this summer.
Where to Put Money to Work
Why Underweight Tech Despite Recent Weakness
Gabor has been rotating out of tech since August 2024.
Gabor's firm has been underweight tech since August of last year, taking profits and rotating into economically sensitive areas that were outperforming. This positioning allowed them to avoid much of the recent tech underperformance while capturing gains in small caps and other sectors where the earnings bar wasn't set as high. Coming into January, the portfolio was very underweight tech.
Now, for the first time since last summer, they are starting to increase tech exposure — but selectively. The focus is on beaten-down areas like software, not a broad re-entry into the sector. The conviction is that the market will broaden out, meaning investors don't need to be concentrated in one area to outperform the S&P 500. For portfolios heavily exposed to the S&P 500 and in turn tech, the recommendation is clear: take some profits, rotate to diversify, and reduce volatility while positioning for outperformance.
What Drives the Market from Here
Liquidity, Fed cuts, and earnings will take over from geopolitical focus.
Short Covering Rally Many investors were short going into last week. As geopolitical tensions cool, short covering is driving violent moves higher.
Dollar, Oil, and VIX Peak Confirmation that the dollar, oil, and volatility have topped will signal the all-clear for risk assets to rally sustainably.
Fed Rate Cuts A Fed that starts cutting rates will add liquidity to the market, fueling further upside in economically sensitive sectors.
Strong Earnings If earnings remain robust while rates stabilize and the Fed eases, that creates the most risk-on environment possible for investors.
The Inflation and Oil Outlook
Inflation spikes next month, then stabilizes and decelerates by May.
The Inflation and Oil Outlook
Gabor expects the inflation print next month to accelerate because oil remains substantially higher than a few months ago, even after today's sharp selloff. But the market is looking through that data, pricing in an expectation that oil will trend down over the next three to six months. Inflation will spike in the near term, stabilize in May, and then begin decelerating. The market is signaling that the coast is clear — if not, it would have sold off harder last week with oil at $100.
Gold as the New Safety Play
Replace bonds with gold for the best defensive positioning.
“I would replace your bonds with gold in our opinion. So best safety play in the market is gold.”
Key Numbers from the Interview
Software down sharply, oil elevated, and double-digit returns expected.
What Could Derail the Bullish View
War escalation and oil surging to new highs would force a pivot.
What Could Derail the Bullish View
If the market is wrong on the war and geopolitical conflict escalates to new levels — with additional countries entering and driving oil to new highs — the entire bullish thesis breaks down. That scenario would force Gabor's firm to pivot again and reassess risk exposure. For now, the market is pricing in de-escalation, but geopolitical risk remains the single biggest tail risk to the call for all-time highs by May.
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