UL - Buy tomorrow if above $56.60, stop $56. Target $72. Once above $59, raise stop to $57.50.

BucketofBalls99 said:

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jamey said:

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Comes off like an 80s comedy and the lead character promises no more homework in his run for class president

Trump could really do some things if he'd stay on target. DOGE, bitcoin, immigration...etc. No one POTUS is changing how gov is funded

Dpnt want to start a politics discussion but he's throwing so much crap into the fan, eventually the market isn't going to like the blowback

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I agree.

He's moving too fast. He learned from his first term and is now trying to do everything he wants to do in his first week, and really going to try and do everything he possibly can this term. And it may end up backfiring on him at some point.

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Meh...let him do his thing. After the last 4 years, re-establishing American dominance requires a full measure. A lot of central banks are taking physical delivery of precious metals, fewer countries are buying our long term debt, former treasurer giving away Russia's interest on treasuries to Ukraine, and Saudis were a hair away from joining BRICS. If pegged countries lose confidence in the US dollar, it's not long before Americans lose confidence as well. And it all goes to crap from there...

He's got a lot of work to do and a narrow window to accomplish it before mid-terms are here.

What I'm watching for - FED day tomorrow. Today will likely be recovery day and might continue tomorrow mid day. Is this a dead cat and FED pushes lower through end of week? Or does FED put an end to yesterday and we are up into mid February?

And when I say FED, I merely mean it as a catalyst. Nothing they do is actually driving the market as they are completely reactive on a 3M - 6M delayed basis to short term rate movements. But the market loves using FED days, even ones where the expected move happens, as a decision point or volatility engagement.

Right. I view this like all his tariff threats. He's positioning himself for a better deal for the American people. Sure, no income tax would be great. What's more likely is he's anchoring there so he can get something else in return.

Deepseek is supposedly using the older H100 chip from Nvidia. Their stock price was betting on hyper scalers buying massive amounts of the more expensive b100 chips.

If you can get near equal performance on the H100, then you either don't need the B100, or at least not as many of them. That's the risk I see.

Key word here is supposedly.

This stuff isn't black or white and they are not being transparent on what exactly they used the old chips for. Training a model is super intensive, what did they use for that?

I'm sorry but I'm not buying what they're selling. Chinese firms are notorious for telling part of the story

AAPL

Many of you are forgetting the canary in the coal mine.

One of the longest term, most widely played games is the shorting of JPY. This is done in massive amounts.

Let's go back to the 1980's. Japan's market topped and rolled over, initially bottoming in the early 2000's, getting a deadcat, and then ultimately bottoming in 2009. An 80% loss over a 20+ year timeframe. It was a depression.



Their central bank interest rate went from 6% in 1991 down to 0.5% by 1995.



Funny how central bank cuts only make the problem worse. Doesn't matter what country it is. They are all the same. But that's another conversation.

After a short stint of raising rates between 2006 and 2008, from 0% to 0.5%, and after the short bounce in the market sold all the way back off, rates went back to 0%. From that time to present day, rates have never been back above 0.5%, despite their market completely recovering now nearly 40 years later, only coming off the 0% - 0.1% range last August. Hmm. Wonder what happened that day?



You see, trillions of dollars have been depending on 0% rates in Japan for a very very long time. Since 2011, big money could depend on 0% Japanese rates as they continued to stimulate their recovering economy. As this happened, the Yen continued to fall against the world reserve currency, the dollar.



Notice the period of time where it stopped falling and went sideways / slightly up? 2015-2020, which despite US equities mostly moving higher, was really the only turbulent period between 2011 and now. Obviously there were other forces at play that might have caused some US market turbulence like Covid, inflation fears, etc. But the one dependable thing, was the Yen would continue being weak.

So what did this big money do? Why is this important?

Well, they shorted the Yen. Think of it like a loan. They would sell the Yen and receive cash. And since everything worldwide is settled in dollars, and not Yen, these loan proceeds would mostly find themselves in American equities and treasuries, thought to be safe. To short in large amounts, you obviously have to carry a margin balance that could meet a liquidity need should the trade go against you. So while they would receive these "loans", it would tie up money merely to carry the trade. But the loan they received would be leveraged into US and other world equities and earn a return far greater than the cost to service the loan and be worth the risk of the money set aside for the margin. Again, this has been going on for over a decade.

As long as the Yen stays flat or goes down, and the investments the loans were placed in go up, this was an extremely profitable regime for a LARGE sum of world liquidity AND leverage.

But what are the risks?

1. Japanese interest rates rise. While problematic because the fair value of the loan decreases, the borrower isn't necessarily paying that increased rate and is only paying the rate agreed upon when they borrowed for whatever term was agreed upon. So their maintenance cost on the loan doesn't rise. They might need to set aside more for potential fair value losses as margin, so they might sell some profitable positions, largely US equities.

2. The Yen rises. This is the problematic one. Because if the JPY strengthens against the dollar, that raises their cost of maintenance immediately. This has to be immediately hedged and triggers a huge liquidity need globally. This is why you see WORLD MARKETS decimated on Aug 5th. The huge rush to obtain liquidity as fast as possible from anywhere you could get caused that chaos rush through the tiny door of the burning theater.

This..



is what caused Aug 5th. Once liquidity needs were met, the selling in equities ended. It was that simple.

But look closer..



Japanese rates were just raised back to 0.5% for the first time since 2008. And the Yen started moving up again. And US equities, largely the ones closest to all time highs and having recorded the most profit, tanked yesterday. Coincidence?

Now tell me, what do you think happens if the Yen REALLY starts to move up?



And here's the kicker. Should JPY tank, that's not necessarily a good thing anymore and could be even worse. Why? Because Japan too is now worried about inflation, and if they were to continue a low rate environment, it could trigger massive hyperinflation there that would trigger even more worldwide calamity long-term than the carry trade blowing. Hence why they are attempting the slow manageable raises in their rates. They are trying to manage the carry trade unwind slowly, which sucks liquidity out of the entire world. But NOTHING can go wrong. Any spikes in the Yen, and the whole world is toast, because everything tied to this is extremely leveraged.