To The Moon

The increasing likelihood of the Fed cutting rates by 50bps this September together with BoJ shift away from zero rates will aggravate the unwinding of the carry trade. Everyone who borrowed cheap JPY and bought into a market that kept going up… their losses are amplified by a surging yen and a dropping US market. The panic is already showing in the $Cboe Volatility Index(VIX)$.

Flight to safety trade is on today. $iShares 20+ Year Treasury Bond ETF(TLT)$ is becoming a safe haven. $Cboe Volatility Index(VIX)$ suppression is falling apart.A bet for $iShares 20+ Year Treasury Bond ETF(TLT)$ Image $iShares 20+ Year Treasury Bond ETF(TLT)$ up 5.22% so far this week if that can hold into the close would be largest weekly gain since March of 2020, the week the pandemic started to get priced-in. @JStanleyFX@JStanleyFX $iShares 20+ Year Treasury Bond ETF(TLT)$ - The next 4 year cycle high is due in 2024. The last three 4 year cycle highs occurred in July. This one

Since the beginning of last year, one of the key drivers of the U.S. stock market rally has been AI. However, after the steep rise in AI stock prices, many investors were waiting for more evidence to confirm the sustainability of the AI rally. Fortunately, a series of positive news on Wednesday boosted investors' confidence and reaffirmed the long-term trend of AI.Against this backdrop, chipmaker $NVIDIA Corp(NVDA)$ soared 11.4% intraday, while memory chipmaker $Micron Technology(MU)$ jumped 7.7%, chip designer $ARM Holdings Ltd(ARM)$ gained 6.6%, semiconductor manufacturer $Taiwan Semiconductor Manufacturing(TSM)$ rose 5.4%

Friday's plunge saw three major sources of panic: nonfarm payrolls, Amazon earnings, and Intel earnings.Currently, CME's rate tools are pricing in a 50bp cut by September, which is quite extreme.Initially, Powell's remarks about a potential September hike were in line with market expectations. However, the massive 110K jobs miss versus the previous 170K print was too glaring. Powell's rhetoric abruptly turned hawkish.In any case, the Fed can once again take the blame for the market rout. After poring over the afternoon's data, the overall sense is that both bulls and bears went crazy in the 5300-5400 range on the S&P 500. $SPDR S&P 500 ETF Trust(SPY)$ SPY activity remained dominated by defensive put spreads, essentially avoiding any "line i