Bullish Case: CPAC’s return-surface likelihood clusters around modest moves (about -10% to +10%), aligning with known mean-reverting behavior; the current AI tilt (+3.29%) points into that higher-likelihood band (inferred from the CPAC surface). Relative to my prior ~52% rangebound mode, I trim to ~48% after CPAC’s +13.5% over ~60d (calibration). SPY IV skew shows downside pricing but not broad panic (uncertain if it persists). Falsify: earnings/guidance don’t show margin/FX deterioration.

Bearish Case: Even with mean reversion, the CPAC surface still assigns visible probability to larger negatives (tail pockets beyond ±20%). After a +13.5% ~60d rise, mean reversion can invert (known setup), making another -10%..-40% drawdown plausible if fundamentals slip. The SPY IV surface shows higher implied vols at lower strikes for intermediate tenors (inferred tail-risk pricing), supporting bearish convexity. Falsify: guidance cuts or observable FX/input-cost pressure; for crash-tail relevance, SPY tail-IV must rise with a broad selloff.

Potential Outcomes:

1. 48%: -10..+10% if no surprise downgrade (falsify: 2 straight EPS/margin misses).
2. 22%: +10..+40% if infra/tender + margins hold (falsify: revenue/EBITDA miss).
3. 14%: -10..-40% if Peru FX/input costs hit (falsify: guidance cut).
4. 6%: >+40% on bid filings (falsify: none within 60d).
5. 10%: <-40% if SPY tail-IV spikes with market -15% (falsify: IV not rising).

July 25, 2026