Jayesh Chandra Gupta, a UAE-based investor and founder of Peptomist, a Delaware-based investment advisor, has warned investors to prepare for potential turbulence in global financial markets.
In a detailed conversation with The American Bazaar, Gupta said his firm’s internal physics-based quantitative system indicates that a major market correction cycle could begin as early as this week.
During the interview, conducted on Thursday, he outlined the logic behind Peptomist’s proprietary forecasting framework and explained why the firm is shifting client capital toward more defensive positions, including bonds, Treasuries, and bearish options trades.
Gupta’s warning comes at a time when U.S. equities have continued climbing despite ongoing geopolitical tensions, energy market disruptions, inflation concerns, and fears of slowing global growth.
The investor said the disconnect between market sentiment and economic fundamentals could eventually trigger a sharp correction. He said the company’s internal system is built on concepts inspired by physics and behavioral finance. The framework analyzes market movements using ideas connected to gravitational forces, momentum, acceleration, liquidity pressure, volatility cycles, and investor psychology.
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The model stems from Gupta’s earlier research that was published in the Journal of Technical Analysis by the CMT Association. The system studies markets as dynamic force fields rather than relying only on traditional technical indicators, he said. “We have an internal quant system, which has been predicting major market declines across history,” Gupta said, noting that the framework has historically aligned with several previous correction phases, including the 2016 Greek financial crisis, the 2018 tariff-related selloff during the Trump administration, the COVID-led market crash in 2020, and the 2022 decline linked to the Russia-Ukraine war.
During the interview, Gupta referenced charts and internal material that he said had been shared with clients months earlier as part of Peptomist’s market outlook. “This is something that we posted for our clients 5 months back,” he said. “This is around December that we posted on LinkedIn, so that people are aware as to what we’re talking about.”
Gupta then pointed to several historical moments where he claims the the system identified potential turning points before major declines became apparent to broader markets. “You can see this, that these are the major market date corrections that our system has been predicting,” he noted.
According to Gupta, the framework is now signaling another potential correction window beginning around May 14-15, 2026.
“We expect the markets to start correcting from here onward,” he said. Gupta argued that the current rally reflects not only investor optimism, but also structural distortions within the options market. A major part of his argument centers around what he describes as an artificial rally fueled by options trading activity rather than strong economic fundamentals.
“The idea is simple. If you see the current rally in the stocks, in US stocks, per se. It’s largely driven by something called as gamma squeeze,” he explained. Gupta said many retail investors rushed into call options after markets rebounded from lower levels, creating a chain reaction in which market makers were forced to purchase underlying shares to hedge their exposure.
“If somebody is buying call options, somebody has to sell call options,” he said. “And the person selling call options are market makers, some of the big banks which act as market makers in the stock market.”
According to Gupta, that hedging process itself became fuel for the rally. “So, this created a self-fulfilling prophecy, because retail started to buy more call options, they started to sell more call options, and buy underlying,” he said. “So that led to a squeeze called gamma squeeze, and leading to S&P towards 7,400.”
But Gupta warned that the same cycle could rapidly reverse once sentiment changes.
“And it’s not a one-way street. It also works the other way,” he said. “When it starts to drop, market maker will start dumping the shares that they hold.” Gupta repeatedly stressed that he believes the broader economic environment does not justify the current optimism in equity markets.
“We believe that the fundamental backdrop, is not strong,” he said. He argued that the world economy is still struggling with inflationary pressures tied to energy and supply chain problems, especially around crude oil, fertilizer production, and food prices.
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“The global economy is facing serious shortages,” Gupta said. “Crude oil is also linked to production of fertilizers and leading to food inflation.” He also pointed to tightening monetary conditions created by higher interest rates and shrinking liquidity.
“Liquidity was already being swept away by the Fed,” Gupta said. “By increasing the interest rate, liquidity was already being kept away.” Those pressures, the investor noted, are now colliding with geopolitical instability and rising consumer costs. “Suddenly, there is an inflation shock that’s coming,” he said.
The Peptomist founder also discussed how he believes the situation could affect economies outside the United States, particularly Europe, India, and emerging markets that remain dependent on imported energy supplies.
“Europe is facing the problem, India is facing the problem,” Gupta said. He warned that consumers globally are already starting to feel the impact.
“It impacts the pockets of the consumer,” he said. “It really does, because it is now being passed to the end consumer, and it leads to inflation.” Gupta also claimed that physical energy markets are showing stress beyond what is visible in official benchmark prices.
“While we see paper market, we see the stock market, the price is $105 per barrel,” he said. “But in reality, the physical trading is happening at a premium.” He added, “Paying $10 to $15 more! Yeah. $20 more!”
Because of these risks, Gupta said Peptomist has adopted a defensive investment strategy for clients. “The correct time now is to put money in bonds,” he said. “You need to look at bonds in US, you need to look at government bonds, treasuries, you need to look at Japanese government bonds.” He said the firm is also using options strategies tied to both equity declines and volatility spikes.
“We are selectively short at the moment with long-dated put options,” Gupta said. “Three-months plus put options in S&P, we have call options three-months-plus in volatility index.” The investor added that the firm has also taken bearish positions in silver and individual technology-related stocks.
“We expect that this rally is almost over now,” Gupta said. “And it’s time to make money on the downside, hedge the risk.” While Gupta expects markets to decline, he insisted that his outlook is tactical rather than permanently bearish. “We are not permanently bearish,” he said. “Once this decline fully develops, we want to make money out of the decline, and then redeploy at an attractive entry price.”
Peptomist currently expects “something to the tune of 20% drop” in the S&P before conditions become attractive again for re-entry into equities. When asked why his system specifically identified the current time window, Gupta said, “Market cycle always happens, but what is the reason for it? We only get to know later.”
He also shared his broader philosophy about market psychology, arguing that markets often move in ways that surprise and punish the largest number of investors. “The stock market goes in the direction. In which it embarrasses the maximum number of participants,” he said.
“Everybody wanted to short it at 6,600, now everybody is embarrassed.” He referenced an old Wall Street saying to explain why markets can continue rising even amid worsening headlines. “You buy when the cannons are shot. And you sell when there are trumpets of victory.”
Gupta also used a statistical analogy involving a village estimating the weight of a bull to explain how crowd psychology creates cycles of optimism and pessimism in financial markets. “There is something called a standard normal distribution curve,” he said before describing how markets swing from one extreme to another as investor positioning becomes crowded.
Despite his strong warnings, Gupta emphasized that no forecasting system can perfectly predict the future.
“If I can predict that, then I’m God. I can’t do that,” he said when asked about the precise timing of a market bottom. Instead, Gupta said his focus remains on risk management and positioning.
“I can only manage my risk with the best of my ability, using my fundamental analysis quant system,” he said.
For now, Gupta believes investors, particularly retail participants and retirement savers heavily exposed to equities, should remain cautious until market conditions stabilize again. Peptomist Capital in the UAE, launched by Gupta in 2024 as an advisory business, provides investment advisory services to clients.
Currently, Peptomist LLC, based in Delaware, is registered as an exempt reporting investment adviser for separately managed accounts. The firm is also in the process of establishing a Cayman Islands–based long-short equity hedge fund. np.