🧃🛡️

People on here always want to hear a singular decisive unchanging view (and a bullish one of course) but that is not really how trading goes. People can do that and hit the jackpot and become heroes but that is more akin to gambling than thoughtful trading. Being a good trader means mapping out different configurations of the future and staying open minded and observing how newsflow and price action coalesce to validate one of those scenarios. Playing the odds and managing risk. I have been fortunate and protecting the money I already have is more important to me than getting a moonshot 20x. In that vein, you shouldn't follow me for clear trading calls that can be copy traded, and if anything I want to fully move away from that. I change my tactical views all the time and it's not feasible to update you all on their evolution. I also feel a genuine sense of responsibility towards others and don't like to leave people hanging. I am here out of my enjoyment of writing and desire to exchange views with sharp people, and I don't have a need to optimize for clout that can someday be used to shill my own coin or whatever, because I will never do that. So instead it's more constructive for me to share insights about the big picture, because those will remain more stable, and maybe something isn't directly tradeable at the moment, but can help give color to the way the next 6-12 months unfolds. My big thesis around "There's Not Enough Money in The World" (see pinned post) was a good example of this, it wasn't a directly tradeable call at the time, but it predicted one of the most important macro dynamics for the year. It is genuinely a complex time because AI is changing everything. There are a lot of different cross currents. We've had the AI capex boom but the rate of change is slowing down, and now we are starting to explore the limits of financing capability as money is becoming tighter everywhere. There is reflexivity here, because as financing for AI capex tightens, sentiment around AI worsens, which further tightens financing, and so on, and so forth. We have the fact that AI is starting to unweave the fabric of the world as we know it, and will structurally increase uncertainty. Usually uncertainty is kryptonite for risk appetite, and increasing uncertainty is bad for asset prices, and decreasing uncertainty is good for asset prices. We also will have a lot of unemployment from AI. It's becoming more likely we see the initial wave of this next year, but the early stages can be bullish, because it won't be enough to meaningfully impact passive flows, but it will weaken economic data enough to potentially nudge the Fed into pivoting to be more dovish. This is combined with the fact that the 3 most hawkish members of the Fed, Logan, Hammack, and Kashkari, are all regional Fed Presidents that will roll off into 2027. So I'm hopeful that early 2027 will lead to better conditions. As the snowballs keeps rolling down the hill, and AI layoffs become significant, this will surely be bearish, since it will impact passive 401k flows which are a key underpinning for the market, it will reduce consumer spending, and lead to asset sales as unemployed people will need to fund living expenses. We are in an environment where asset prices (market caps) are very high relative to flows because they have generally been unidirectional. This has been a super bullish dynamic on the way up, but it cuts both ways. Timing all of these very factors is difficult, they are things that I keep in the back of my mind as I trade around shorter term catalysts and newsflow day to day. It's easier for me to say that conditions in equities will be challenging through the end of the year because I know the following: 1. Anthropic IPO will suck a ton of money out of equities directly, at least $40-50bn, and mostly out of AI stocks specifically. To me this is unavoidable. It doesn't mean I would short into the IPO but it is a major headwind. 2. Fed will likely pause in Oct and hike in Dec, but in any case, there will be no pivot before year end. Liquidity will remain tight. 3. Retail money has shown many signs of being tired, and spread too thin. The price action around the recent Nasdaq ATH reminded me of late October 2025, and this pattern recognition flipped me from bullish to cautious. I wish I had posted about it publicly then (people in my group chats know) but I was still locked out of my X account at the time. 4. Hedge funds have gotten rekt in October (yesterday was one of the worst days for them ever, across classic L/S, quant, and market neutral pods) and they will be reluctant to re-risk into year end, especially classic L/S funds are more likely to book their years and play defence given their incentives (annual returns are the main basis for relative evaluation and bonuses). Pods will also be more conservative because many teams will be closer to their drawdown limits (usually capital cut at -5% and fired at -10%). 5. As bills issuance has been so high in terms of mix, this puts pressure on repo/plumbing. A simple illustration of this dynamic is the following: if you spent a ton of money but had to fully pay off your credit card frequently, you would need to maintain more balance in your checking account to manage the float. This was manageable for most of the year due to the Fed's RMPs but Warsh recently ended it. Repo/plumbing tightens in Dec because banks like to close up their books early ahead of year end. When liquidity in this channel is abundant, the year end factor is irrelevant, it only matters when things are tight, which they likely will be. This happened last year. The main scenario where this is wrong is if we get a decisive resolution to Iran + Anthropic IPO is delayed. All of that said, there will be at least one good tradeable bounce within the next few weeks, this is inevitable. And I hope that on the other side of this, we get resolution on this factors hanging over the market, and we can have strong markets again. The market cannot be roaring all the time. The last few years has really been more of an aberration when you compare it against larger slices of history.