Rekt Mkts: Asia plummets

Yday's relief bounce didn't last long tbh...and to me it's yet another sign of the "sell on strength" mentality that markets are seeing atm. If you've been reading this regularly you'll be aware that I've been cautious on risk overall and it does now seem that is coming to fruition - goal for me is to be able to add risk in equities at lower levels still, starting nibbling a bit yday but generally maintaining patience with a few vol events this week.

SPX finished basically flat yday while NDQ fell 1.5%. This morning SPX futures are basically flat and NDQ futures are down around 0.8%, so once again the weakness seems to be concentrated in tech. WTI is another 1.9% lower around $81 after the US and Iran pause, while gold is down around 1.3% near $4,020. The latest Treasury close had the 10Y around 4.64%, down 6bps, and the 30Y around 5.13%, down around 5bps. Sort of feels a bit dicey that we're getting what we should theoretically want, ie, lower oil and lower rates...but stocks are also selling off in tandem...to me that says it all really for the technicals of the equity market and it does feel increasingly likely that we get that larger backup people like me are hoping for at some point in the next two months. FOMC this week and I don't think a rate hike is off the cards albeit unlikely, but either way I do not see a material sustained bounce afterwards, if there is any relief bounce I would potentially look to short into it as I think it will be short-lived.

SPX was flat, but NDQ fell 1.5%, NVDA lost 5%, MU fell 2.3% and SNDK dropped another 11% which was certainly notable...I have a preference to buy MU over SNDK but we're still not at levels that are compelling for me, and I do think that intraday bounce on MU was quite notable. Some research reports allude to stock buybacks there so I think that's something to be aware of. NBIS is another one on my radar which was basically flat, so even inside the AI group this was not one clean move, but memory and the biggest chip name were where the pressure sat...just sort of seems bifurcated and frustratingly the stuff I want to buy is not low enough yet but must not give in. Korea has made that pressure much harder to ignore today. KOSPI closed down nearly 11%, SK Hynix fell 14.6% and Samsung dropped 13.4%, while Kioxia lost 18.3% in Japan. Concerns around China's CXMT and whether AI infrastructure spending can remain this aggressive have hit a sector which was already struggling to hold rallies. US pre-mkt is confirming some of it, with MU down around 5% and SNDK also weaker. I remain bullish on memory longer term, but this PA is exactly why I kept saying the downside risk looked bigger in the short term. Had quite a nice win on short GOOGL calls which I monetised for about a 70% return (I talk about these trades in Rekt Mkts Pro btw, you can join the waitlist to subscribe at mkts.rekt.com/join). I'm not adding to memory before SK Hynix reports tomorrow. If the numbers are good and the market still sells them, that probably tells us more than any bullish demand slide will. If it can absorb the news and hold, then maybe there is finally a trade, but I want to see that first. In general quite a few things on my radar to buy and I guess that is the luxury of being in a position with a lot of cash currently, but going to continue to exercise patience.

Crypto has finally stopped looking so resilient versus tech. This morning BTC is around $63.3k, ETH is around $1,876 and SOL around $73. BTC held near $65k through the earlier NDQ selloff, but with NDQ down 1.5% yday, futures lower again and Korea getting smashed, it has now slipped as well. PONS is down around 15% today at roughly $0.05, although it is still about 2.8x my average which is alright. The selloff I think was probably a combination of profit taking and some fears of competition after Rialto, a Robinhood Ecosystem partner, also created a launchpad...but tbh you can look at the website and it's pretty low/poor effort and metrics do not show any sign of stealing market share $PONS...which still trades at a 0.7x MC/Revenue multiple...as long as fees and momentum keep going (which they are) I expect that multiple to compress towards Pumpfun (3.5x)...I don't see a better trade in crypto currently granted it's a small cap. Good luck today.