Rekt Mkts: Memory top is in for me

Should have trusted my gut and monetised some of the memory bounce ahead of SNDK earnings but is what it is...another stark reminder that strength continues to get sold in this market and with stock indices back to the top of the range I certainly favour lightening up on risk overall here ahead of the rest of August and September.

SPX slipped 0.2% yday while NDQ fell 0.8%. This morning SPX futures are basically flat and NDQ futures are down around 0.5% Rates eased slightly at the latest close, with the 10Y around 4.62%, down roughly 1bp, and the 30Y around 5.17%, down about 1.6bps. WTI is up modestly near $75.70 as Iran and Oman talk up progress on a Hormuz route, while gold is up around 1.9% near $4,327. Payrolls are tomorrow and that is the obvious next macro vol event. Until then I think the more useful signal is whether this weakness stays concentrated in crowded AI and memory names or finally drags the broad index with it. With stocks at the top of the local range, it feels like to me risk/reward into payrolls is skewed to the downside and I have a preference for being flatter on stocks here.

The US index move yday was fairly contained, but the stocks I care about were already weaker underneath it. MU was basically flat and SNDK fell 5.4% into earnings. SanDisk then beat quarterly earnings and revenue estimates, but mixed guidance has the stock down another 8%-9% pre-mkt. That is pretty much the definition of good news getting sold. Asia has confirmed it rather than shrugged it off. KOSPI fell 4.6% today, SK Hynix dropped 10.4%, Samsung lost 6.3% and Kioxia fell 10.2%. Unlike earlier in the week, this is no longer just Korea-specific technical weakness while Japan holds up. The memory complex is being repriced across the region, and MU is down around 3% pre-mkt too. With quite a pronounced lower high being set, I will be getting out of the rest of my memory risk today at a small net gain (shoulda woulda coulda sold earlier), although worth mentioning I am still very bullish on AI as a whole I just need to figure out i) what valuation is considered cheap for memory given risks ii) is memory the best way to express the AI trade? For now I think I would need to see lower prices to get involved again.

Crypto is actually showing a bit of relative resilience while memory gets smashed. BTC is modestly green around $64.8k this morning, ETH is also slightly higher near $1,910 and SOL is basically flat around $74. It is not some huge risk-on move, but holding firmer than NDQ futures and Asian tech is at least notable after crypto spent most of this week watching equities go past...continued dislocation of the two markets. PONS is the ugly bit, down around 28% near $0.018 after Uniswap created its own launchpad. it certainly makes the ceiling much lower for Pons but also there is a significantly bigger earnings potential for people launching on Pons, with 70% of fees going to creators, whereas for Uniswap it's just 25% of fees with the remaining 75% going to Uniswap itself. Pons is still ranging between $80-90k revenue per day so at a $13.5m mkt cap i feel less inclined to sell it, however, i think i'd be looking to take profits once that multiple goes over 1x as i think the risk premium attached to its longevity is higher. that being said, i do think onchain is only going to grow bigger for crypto in the next few weeks but you just gotta be really nimble -> it does mean any of these launchpads which can maintain mkt share can do really well and that is the opposing thought to me on Pons...the most bullish thing would really be if we could get a runner there. Good luck today.