Rekt Mkts: Don't buy strength...

We are hovering around the top of the range in equities where stuff seems bid but I'm back to where I was a few days ago trying my best to practice monk-like discipline and not buying into strength up here (and I made one mistake in doing that which didn't cost me too bad but was still annoying). I still think there's good reason for caution, happy to be sidelined for now (as much as I hate it), but the recent payrolls print does put this theory into question.

Futures are up this morning after payrolls came in negative, -23k vs 80k expectations with the revised number from last week dropping to 20k from 57k. I guess the readthru is less chance of a rate hike this year and indeed we're seeing treasuries rally with 10Y 7bps lower and 5y 9bps lower...30Y still hovering around 5.17% which is about 5bps lower. With oil stabilising and payrolls struggling, you would think and hope the inflation narrative improves...I think we need to see more data for that proof and I think price action today and Monday will be very telling as the market will once again show its hand - are we still selling strength or is the narrative changing.

The broad US indices only slipped yday, but the stuff I care about was weaker again. SNDK fell 6.8%, MU lost 1.3% and NBIS dropped 13.3% after Michael Burry publicly declared a short, while NVDA was basically flat. So this was not a clean AI selloff, but it was another poor session for the higher-beta expressions of the theme. Asia isn't giving a clean reversal either. KOSPI is down around 0.6% today, but SK Hynix has fallen another 4.9% and Kioxia is down 2.1%, while Samsung is basically flat. SK Hynix also plans roughly $38bn of new investment to expand memory production. That supports the long-term demand story, but it also reinforces why I need a valuation that compensates me for the capital intensity and cyclicality. SK Hynix has truly been a notable underperformer vs the memory names and while I remain flat and cautious, that is the one that seems to be more attractive to me should technicals shift in the Korean market...I need to get smarter on that. Definitely gonna be interesting to see how all this stuff reacts today, pre mkt it looks like everything is up a solid 5-7% on the back of the payrolls print but so far every time we've gotten up here stuff has generally been sold...so I'm curious to see how the day ends and more importantly what happens on Monday. Even with a strong print my gut says we will continue to see selling here but let's see.

Crypto is quiet again. BTC is around $65k this morning, ETH is near $1,930 and SOL is around $74. The majors are modestly green, but hardly a proper risk bid and much less volatility compared to equities. We are approaching interesting levels here tho on BTC where we're pushing up against the top of the range on this channel and it does get me slightly excited for what happens if we move higher from here. My beloved PONS is staging a recovery...around $0.023 and up roughly 42% after the last few days of carnage. It's worth noting that yesterday we saw the first INCREASE in revenue generated...$103.7k vs the prior day's $93.2k...and that is despite all the new entrants and competition from Uniswap etc. It puts its MC/revenue multiple at 0.5x which I think is still insane...and one thing I do believe for sure is that if it survives these last few days people will certainly have stronger renewed confidence in it. CASHCAT got listed yesterday by Robinhood Spot which I think shows their dedication to the ecosystem, and at this point I can tell you it's not going to be the only coin on RH chain that they will list, I feel like it's making a statement. Given Vlad's commentary on memes + RWAs you'd think the next thing that's listed is not just a meme, which brings the infrastructure/RWA coins into play....there really aren't many and Vlad actually follows the Pons founder (@MEADgod) so here's hoping we see something interesting there. Either way, the RH chain is showing no signs of slowing up which means we will continue to see new participants and watch it grow IMO. Good luck today and touch some grass this weekend.