example of waves. Joe is one of the coins i use to guage signal for eth and onchain divergences which is usually bullish the for the major (leverage getitng wiped on divergences vs. normal selling). idk why it identifies waves so well, mayb bc its one of the last surviving pure onchain no cex coins on eth thats survived multiple waves. tbh i have no idea y it lines up often, but look at the dates on joe and eth chart
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pretty wild - 20% jump in bearish sentiment (40% to 60%) week over week, 7th largest weekly reading ever
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BGC Priv Journal
pretty wild - 20% jump in bearish sentiment (40% to 60%) week over week, 7th largest weekly reading ever
Yep, risk was to the upside.
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leaning top 2 vs. bottom case
idt we get the bottom case unless a new shock blindsides the mkt. Tariffs as is prob wont do it, most of that shock's been likely been absorbed. Most of the move was unwinding positioning from funds, esp foreign funds. They were all long the same stuff that comprises >30% of the index. Deepseek (for nvda, 8% of Q's) + Trump Policy blindsided ppl & made the growth scare come early. For now all incremental data has calmed ppl (growth can be an issue later but its not one now).
no matter what angle u choose to approach why we experienced the drawdown at that speed, all signs point to the action driving things down was unwinding overcrowded positioning. breadth throughout the drawdown was good, Risks r still here but if theres no big new shock, i think markets should calm for a bit (we'll have a better view after aprl 2)
there's more that can be said but that's the tldr
thread of interesting charts/data points - https://x.com/BlueLightCapit1/status/1902721495933071767
idt we get the bottom case unless a new shock blindsides the mkt. Tariffs as is prob wont do it, most of that shock's been likely been absorbed. Most of the move was unwinding positioning from funds, esp foreign funds. They were all long the same stuff that comprises >30% of the index. Deepseek (for nvda, 8% of Q's) + Trump Policy blindsided ppl & made the growth scare come early. For now all incremental data has calmed ppl (growth can be an issue later but its not one now).
no matter what angle u choose to approach why we experienced the drawdown at that speed, all signs point to the action driving things down was unwinding overcrowded positioning. breadth throughout the drawdown was good, Risks r still here but if theres no big new shock, i think markets should calm for a bit (we'll have a better view after aprl 2)
there's more that can be said but that's the tldr
thread of interesting charts/data points - https://x.com/BlueLightCapit1/status/1902721495933071767
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On semis specifically (esp nvda which is important bc super crowded and 8% of the Q's)
People are still unsure about CAPEX spend looking at the back half of the year, in addition to macro growth generally. Semi's are still an area where there's money to be unwound in, clear by MU's earnings reaction. From some questions on the call it’s also clear that ppl are skeptical on where semi's are at cyclically.
Semi's will probably be weak until 2Q25 earnings where ppl can have more visibility into 2H25 as well as 2026. 2Q25 Results could be a tailwind if the visibility is good, however bc of how crowded that area still is, ppl really skeptical on the earnings front bc its easy to get burned on a semiconductor growth story and get caught holding the bag when earnings drop off. Therefore even if it becomes a tailwind after 2Q25 bc of good guidance for the back half of this year, there's still time between now and then for the market to speculate over headline news while they're shaky on the sector. We don't want to see to a lot of news like we got from MSFT yesterday about them cutting some datacenter plans as people can over-extrapolate that headline and interoperate it as a meaningful amount of CAPEX will drop off leading to NVDA's earnings taking a big hit. Even if the news is not something that would effect NVDA and NVDA's supply chain in a big way, the market will likely the assume worst as their initial reaction (like they did to the MSFT news yesterday), since they are jittery over the lack of earnings visibility, so negative news between now and when they report 2Q25 earnings still poses a risk.
When thinking about the impact of this on the market indecies, particularly the Q's, flows to software can offset that weakness like we saw a bit of two days ago wen ppl were roating a bit out of euro/china back to US front running Arp 2 after Trump walked back some of the tarrif stuff. However, when both Software and Semi's go down in tandem like yesterday that’s when the index’s get iffy, esp the Q's.
People are still unsure about CAPEX spend looking at the back half of the year, in addition to macro growth generally. Semi's are still an area where there's money to be unwound in, clear by MU's earnings reaction. From some questions on the call it’s also clear that ppl are skeptical on where semi's are at cyclically.
Semi's will probably be weak until 2Q25 earnings where ppl can have more visibility into 2H25 as well as 2026. 2Q25 Results could be a tailwind if the visibility is good, however bc of how crowded that area still is, ppl really skeptical on the earnings front bc its easy to get burned on a semiconductor growth story and get caught holding the bag when earnings drop off. Therefore even if it becomes a tailwind after 2Q25 bc of good guidance for the back half of this year, there's still time between now and then for the market to speculate over headline news while they're shaky on the sector. We don't want to see to a lot of news like we got from MSFT yesterday about them cutting some datacenter plans as people can over-extrapolate that headline and interoperate it as a meaningful amount of CAPEX will drop off leading to NVDA's earnings taking a big hit. Even if the news is not something that would effect NVDA and NVDA's supply chain in a big way, the market will likely the assume worst as their initial reaction (like they did to the MSFT news yesterday), since they are jittery over the lack of earnings visibility, so negative news between now and when they report 2Q25 earnings still poses a risk.
When thinking about the impact of this on the market indecies, particularly the Q's, flows to software can offset that weakness like we saw a bit of two days ago wen ppl were roating a bit out of euro/china back to US front running Arp 2 after Trump walked back some of the tarrif stuff. However, when both Software and Semi's go down in tandem like yesterday that’s when the index’s get iffy, esp the Q's.
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BGC Priv Journal
On semis specifically (esp nvda which is important bc super crowded and 8% of the Q's) People are still unsure about CAPEX spend looking at the back half of the year, in addition to macro growth generally. Semi's are still an area where there's money to be…
if ur rly long like me (holding spot), OTM puts 3-6months out on NVDA itself or SMH (semi etf) or Q's generally, with $ ur willing to burn for protection is not a bad hedge idea. NFA ofc
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Forwarded from lvv | PUMPY
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don’t be drained
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both thoughts intresting reads, esp teh quoted tweet https://x.com/GavinSBaker/status/1906744903687712975
BGC Priv Journal
normal correlations are coming back. the extra forces (like capital outflows by europe) seem to be fading. solid (purple is es [s&p500 mini futures] & white is EUR/USD)
context:
pic 1) illustrates capital flow of loading up on us assets into trump and the following unwind (i posted on twitter iirc). The Euro/usd pair was anti correlated to stocks and dxy was ~1:1. Can assume thats bc of capital flowing out of us assets back to euro: sell stocks get dollars -> sell dollars for euro= stocks down, dollar down, euro up
pic 2) can see the correlation more zoomed in. Early april the tightened correlation dollar and equities started to diverge. 2 things happened then
a) trump tarrif walk backs and the 90 day pause
b) Less discussed - the asian market starting to price out BOJ rate hikes (this was more bullish crypto imo)
With US stocks, there were still some intraday selling by the europeans, probably selling off the rest of their book that was unhedged.
now the correlations are reverting back to normal - dollar down stocks up euro inline with stocks or negligible. This likely indicates that flows out of US assets has greatly declined, at least the magnitude of it
pic 1) illustrates capital flow of loading up on us assets into trump and the following unwind (i posted on twitter iirc). The Euro/usd pair was anti correlated to stocks and dxy was ~1:1. Can assume thats bc of capital flowing out of us assets back to euro: sell stocks get dollars -> sell dollars for euro= stocks down, dollar down, euro up
pic 2) can see the correlation more zoomed in. Early april the tightened correlation dollar and equities started to diverge. 2 things happened then
a) trump tarrif walk backs and the 90 day pause
b) Less discussed - the asian market starting to price out BOJ rate hikes (this was more bullish crypto imo)
With US stocks, there were still some intraday selling by the europeans, probably selling off the rest of their book that was unhedged.
now the correlations are reverting back to normal - dollar down stocks up euro inline with stocks or negligible. This likely indicates that flows out of US assets has greatly declined, at least the magnitude of it
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starting to get to a point where the relative positioning tailwinds that were big pushers of price are starting to wean a bit. idt the tailwinds going anywhere MTF (next month or two), but short term wouldn't be surprised for a dip soon. There still could be some room to push up before that happens in equities, crypto stalling a bit's likely to happen first -
for crypto could translate to solidifying 100k floor and some alts/memes pulling back and consolidating a bit (like some of them kind of have been the last few days). That could continue to be a tailwind for onchain tho, since they were almost blackholing liquidity for a bit when they'd ramp hard
if we get a pullback i also don't think it'll be anything crazy/violent (barring some negative catalyst) just healthy. non-levered positions probably safu
for crypto could translate to solidifying 100k floor and some alts/memes pulling back and consolidating a bit (like some of them kind of have been the last few days). That could continue to be a tailwind for onchain tho, since they were almost blackholing liquidity for a bit when they'd ramp hard
if we get a pullback i also don't think it'll be anything crazy/violent (barring some negative catalyst) just healthy. non-levered positions probably safu
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