Recovering from failure quickly is the most important part of finding your path to success.

Bounce back, hard. Don't let self-doubt consume you.

Instead, focus forward and carve your path. I've always been a self-starter. One thing I learned early on is that resilience leads to growth. Both within and for our endeavors.

That temptation to give up when the odds are against us is an evolutionary impulse to avoid risk.

That impulse doesn't work in modern society.

Oh boy, managed money is REALLY long US equities now. With the highest exposure since July, per NAAIM data.

Extremes in NAAIM positioning have often been decent opportunities to fade over the intermediate term (not the next 5 minutes).

I wonder, will this time be any different? @TraderadeTweets It looks like a lot of hedges and short positions must have been removed as the bearish responses went from -200 (leveraged short) to 1 (flat-ish exposure).

"But CoreWeave came out of nowhere"

They were aggressively buying Nvidia A40 GPUs in ... August of 2021 "But CoreWeave must be a scam because they grew so fast"

Ever consider perhaps that they were doing something right?

The acquisition of Conductor Technologies enabled them to scale quickly into visual effects offerings, a sizable area of cloud GPU usage.

Wow! US ADP employment report came in at 278k vs forecast 170k. The prior reading was 296K. No weakness in the labor market to be seen here. twitter.com/i/web/status/1… Small and medium-sized businesses were hiring as large businesses were firing

Breaking news: Debt ceiling bill passes in the House, advances to the Senate days ahead of default deadline twitter.com/i/web/status/1… cnbc.com/2023/05/31/deb…

The Treasury may issue up to $700B in T-bills just weeks after any debt ceiling resolution, pulling liquidity out of the market.

While the lack of issuance was helpful to offset the impacts of QT, such a sizable issuance is like an amplifier for tightening financial conditions. What does this mean in plain English?

QT gets steroids.

We've been on a vacation from it, in essence, since October because initially all of the PBoC and BoJ expansion of liquidity.

Then Treasury issuance paused in mid-January.

This has all helped to boost the markets.

So next time a public transit or weather alert doesn't work, or when there's an issue with your favorite Twitter-related third party service, blame the overzealous monetization of all the things. Because $1200+/month for API access is absurd and it isn't a monetary bot deterrent.

https://twitter.com/Mayhem4Markets/status/1647041178850717696

And just like that free Twitter API access is dead as of now. Supposedly this will help reduce the level of bots here.

Let's find out!

Bot bait: Bitcoin, BTC, metamask, ether, doge, crypto, hacked, wallet, stocks, trading, NFTs, $GME, $AMC, Binance, Coinbase Hum... nope still seems pretty botty to me

There's far too much talk around these parts about how the dollar will be vanishing from global trade imminently, but the reality is this is a process that takes decades.

First, the greenback makes up nearly 60% of global foreign exchange reserves. That's pretty massive!

1/ In terms of currency composition of global foreign exchange reserves over time, yes the dollar has been *steadily* eroding.

Nothing dramatic here. About a drop of 12% over 22 years.

No need to panic. Countries can and do still trade outside of the US dollar!

2/

ICYMI, $SOFI is suing the Biden administration to stop the student loan repayment pause.

SoFi claimed the loan moratorium “has substantially injured” the company, which has lost $300M to $400M in refinancing revenue and $150M to $200M in profits since it began in March 2020. 🤦‍♂️ $SOFI has fallen from the high 20s to just above $5 recently, but there are still the ever faithful promoters who continue to advocate for buying the stock of a company that itself admits has been "substantially injured" by the student debt moratorium.

Ignorance isn't bliss.

The best choice for banks is to raise the interest paid on deposits so that they can attract more cash.

Offering a 3.5% savings rate is a much more ideal solution than borrowing from the Fed at 4.75%.

I expect that more banks will raise deposit rates to attract customer funds. Think about it from a bank's perspective. Perhaps they have a debt portfolio that yields 3-4%. The negative carry cost imposed by the Fed's 4.75% lending facility is quite expensive vs raising the interest rate paid on their savings accounts and breaking about even for a bit.

Unpopular opinion: tech will not lead the next bull market, it will lag.

Old world economy stocks will lead (materials, energy, agriculture), because we will be in a supply-constrained world where what they produce will sell at a high enough premium that their profits surge. Further, the next bull market is likely to be shorter and more shallow because inflation will come back earlier and from a higher price base, forcing central banks to intervene much more rapidly than they have for the past several decades.

$INTC double miss. $AMD continues to eat their lunch. Visualizing $AMD eating $INTC's lunch. 👀

Bear markets don't tend to end until:

1) The Fed aggressively eases, beyond an initial policy pivot

2) We are already in a recession

3) Households raise cash (near record long right now on long-term equity exposure)

4) Margin debt reduction approaches 50% y/y (currently ~30%) "But this time is different"

Yes, that may be true, but it isn't likely. If the bear market were to end here and transition into a new bull, it would be around the highest valuations a new bull has ever started within.

That would set it up to be both short and shallow IMO.

One year ago we founded Traderade.com to offer investors and traders a cost effective educational platform.

Our goal is to help our members learn more about macro, fundamentals, technicals, and psychology so that they can become more successful and consistent.

🧵 1/x Since then we've grown quickly into a community of amazing people that are eager to learn, grow and take control of their financial destiny. People that I am fortunate enough to consider my extended family. It's been an amazing journey so far, and we're just getting started.

2/x

The market has decided to try, once again, to front run a Fed pivot. Participants no longer believe in the credibility of what the Fed is saying.

This is dangerous.

Inflation may have peaked, but the threat it presents is far from over, especially if we go back to easy money. The Fed has the capability to increase the cost of capital and remove liquidity from the global financial system to destroy demand by eroding wealth effects, slowing the economy, and making debt more expensive.

But that doesn't work when the stock and bond market fight it.

A 🧵 about the reversal this morning.

Summary:

CPI was hot, but not scorching. Other conditions contributed to the wild swings.

1) Poorly hedged & illiquid market🔻🕳️

2) Bearish managed money (NAAIM) 🧨

3) Expensive $VIX fell in to the selling 🤔

4) Bonds & DXY reversed 👀 Skew was quite low going into today's CPI number. But VIX was elevated (and at its peak about 10 points above realized 1-month volatility).

But because the skew was so low, it suggested that there was more FOMO on the call side than hedging on the put side of $SPX.

Please stop using $SPY and start using $SPX when charting, or analyzing options flow!

$SPY trades a small fraction of the volume that $SPX does.

I see far too many folks drawing conclusions from a tiny set of incomplete data.

$SPX volume Friday: 2.8B

$SPY volume Friday: 106M For example, if one is charting volume profile, and using $SPY, it's a completely different picture most of the time because it's a small fraction of the transactional data.

Charts like these are completely useless.

Use $SPX!

As Powell's speech at Jackson Hole approaches, several key things to remember:

1) PCE, the Fed's favored measure of inflation, prints at 8:30 am ET today.

2) The Semiconductor, Inflation Relief, and Chinese stimulus are likely to be seen by the Fed as pro-inflationary

🧵 1/ 3) Since the July Fed meeting financial conditions have been easing, so much so that junk debt and other long duration risk has been well bid. Not what the Fed wants to see.

4) Stocks have rallied quite a lot, which isn't helping with the wealth destruction the Fed seeks.

🧵 2/

Signs of trouble all around. [thread]

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