Pig In A Python
Mechanical De-risking Market
Credit Creation Falling Is Not Bullish
Mechanical De-risking Market
The market fragility I flagged over the past two months has materialized into a selloff.
Not a big one yet, but a dangerous one that can become big.
I updated my big picture views Friday & Saturday: new or existing clients...don’t miss:
From geopolitical shock to energy shock to supply chain shock to growth shock to AI shock that all can lead to recession shock.
SPX is only down -9% but now everyone can see the sticky volatility regime I have warned was coming beginning of year for “Mar-May”.
Now we learn Trump will meet Xi on May 14th... yup, that’s the mid-May relief I see in the charts. And before that, I see a wee bit of stability starting potentially next week (April 7th-ish). Maybe that will be be a good time to cover some of our VERY successful Semi, Memory, and Market shorts.
But big picture, we have a roll-over on a trend basis for semis - doesn’t help TSM peak earnings expected soon just after NVDA has reversed from its last earnings beat which was seen by the Street (as expected) as nothing less than stellar. Add to that, GOOGL launched TurboQuant which greatly reduces memory demand - which was an announcement I caught next day as more reason to short the Memory & Semi plays.
But unless there is a believable slow-down in this Trump-Netanyahu War on Iran, big bullish bets are off. I simply have to provide the IF-THEN levels and timing for bounces to look for - but must also be paired with a reason to bounce.
The start of earnings in two weeks can help. Banks & Bonds bouncing on support is another.
Long story short, we have a mechanical de-risking market in play as long as we have elevated/sticky/higher oil, yields, dollar and volatility.
