Tom Lee Says This Could Be the Best Market Run Ever. The Math Shows a Glaring Flaw

Why It Matters

Understanding the asymmetric short‑term risk versus the more balanced long‑term upside helps investors allocate capital and manage volatility as the market navigates post‑war uncertainty.

Key Takeaways

• S&P 500 at 7060, 22% chance of 7,000 by June.
• Put skew shows market expects larger downside move in next 60 days.
• December options reveal higher upside probability, skew disappears.
• AAII bearish sentiment over 50% predicts 16% S&P gain next year.
• Tom Lee predicts 18‑24‑month run; volatility remains elevated.

Summary

The video analyzes the recent S&P 500 rally, using options math to test Tom Lee’s claim that the next 18‑24 months could be the best market run.

Using the tastytrade platform, the host shows a 22% probability that the index stays above the 7,000 strike by June, while put‑skew indicates roughly double the chance of a 500‑point drop versus an equal upside move in the next 57 days. By December, probabilities even out, with a 34% chance of reaching 7,575 versus 32% for a 6,575 dip, and the skew disappears.

He cites AAII data: whenever bearish sentiment exceeds 50% since 1987, the S&P has delivered an average 16% return over the following 12 months. He also notes VIX above 20 and elevated VIX futures, underscoring lingering volatility.

The analysis suggests short‑term risk remains skewed downside, but longer‑term outlook is more balanced, implying investors should size positions conservatively while keeping an eye on the potential extended rally Tom Lee forecasts.

Original Description

Tom Lee said on CNBC that the next 18-24 months could be the best market run of our lives. Mike Butler runs the options math to see if the probabilities back it up.

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