AU Thoughts

The selloff was expected. SPX bounced at 7715 and should chop around 7725 while waiting for Warsh to speak. My entries are usually pretty accurate, but I'm not that good at taking profits. I wasn't at my computer before the market opened on Monday, so I missed the news about Anthropic filing its S-1. Otherwise, I could have covered my shorts and gone long right then, and this week would have been perfect. My intraday trading and swing trading will be a bit different. From now on, I'll only share my directional bias and leave the entry and exit points up to you guys. Giving out exact price levels puts some pressure on me, which can affect my trading. Things are a bit tricky to trade right now, so I need to think it through. Too much capital front ran the move into SOXX on Monday and Tuesday, so buying TQQQ after the FOMC might be a better option. With so much capital front running semiconductor stocks on Monday and Tuesday, semiconductors could rotate with software, biotech, and the Mag 7 over the next few days, with gains and losses rotating between these groups.

There were 500 contracts sold at ES 7766. Orders like this are usually market maker hedges, and market makers generally use ES to hedge. To be honest, SPX could potentially reach 7775 if oil prices were not rising, but oil has moved higher, so 7750 is the absolute ceiling for SPX. This GEX profile also looks unfavorable. It is a typical FOMC ramp and dump setup, and there are quite a few bearish iceberg orders around this level. US equities usually consolidate after two days of rallying. The first day is the initial rally, the second day is known as the second day of the trend, and the third day is when the market should consolidate. NQ probably cannot get much higher than 30000 today either. Without positive catalysts, it most likely will not even reach that level, making the premarket high the high for the day. I am calling for a selloff today with 100% certainty, either at the open or when the FOMC starts. Given how much the market has already rallied premarket, I lean toward SPX 7745, the level marked on my chart, being the high for the day, although it could reach 7750 at the open. I plan to buy after Warsh's remarks, closer to the market close.

BTC has reached its target, and it probably won't be able to rally much after the open, as I don't think SPX can move much higher either. SPX is facing significant resistance here. SPX 7750, ES 7775, and NQ 30000 seem a bit extreme. Based on my experience, this type of GEX profile is likely to see a sharp selloff right when the FOMC starts. In the past few FOMC meetings, we have seen similar GEX profiles. A large amount of puts usually comes in around the open, but price keeps pushing higher against the put flow all the way until the FOMC starts, then sells off sharply. The market has already rallied quite a bit premarket today, so we could see an immediate selloff or choppy price action after the open. SPX 7775 looks like the upper limit unless there is major positive news, which seems unlikely with oil prices rising again. I'll wait until closer to the US market close before buying in. I base my views on data, not guesswork.

This type of SPX GEX profile has appeared many times during past FOMC meetings. In most cases, we see a low volume rally during premarket and the period leading up to the FOMC. Price keeps grinding higher against heavy put positioning, only to sell off sharply as soon as the FOMC starts. I expect BTC to rally to 81,700 to 82,000 before selling off once the FOMC begins. For SPX, it depends on the GEX profile at the open. The data here is from OptionDepth

All shorts are fully closed. Crude oil broke below support, and a rate hike was never expected tomorrow anyway. My SOXL short from 95 last Thursday ended flat, although I did take one swing trade in between. The BTC and altcoin shorts made some profit. I expected SOXX to rally only after Wednesday, but it has already rallied much more than expected ahead of schedule. So I don't want to get back in to trade the rebound after Wednesday. I'll look for another opportunity to short SOXL later. MSTR is strangely weak for some reason, but Binance spot inflows have remained steady, while perp inflows have also continued. A lot of traders have been adding to their shorts here, just like last week, so a short squeeze tomorrow is very possible. Waiting for the next trading opportunity. Could have done a better job taking profits this time

Honestly, the market is performing this poorly even with positive news about US-Iran peace talks today. With the FOMC on top of that tomorrow, a sharp selloff is very possible

Distribution👀

Update: Spot buying was absorbed yesterday, and some resting spot bids were filled without triggering a price rebound. Overall, resting spot bids were pulled down by around 1,000. Also, while NQ rebounded yesterday, BTC and MSTR remained very weak. I suspect we could see another leg down around the FOMC. Gold is also falling, which is a bad sign

It looks like Anthropic’s accounting “fraud” has been exposed, and the market is starting to sell off

https://x.com/frankdegods/status/2114765682768310654 https://x.com/GaryMarcus/status/2114760773914255681

That makes sense. I was too focused on watching the market and only glanced at the headlines without reading the details. This is a major bullish catalyst. No wonder the market rallied so much. I overlooked it. I'll wait and see how the market closes. If it closes strong, I'll cover my shorts. If not, I'll cover them gradually on Tuesday and Wednesday. I'll most likely cover my SOXL short at the close first, while keeping my BTC and altcoin shorts open for now and waiting a bit longer. https://x.com/GavinSBaker/status/2114744804147912852

NQ and SPX should see a pullback intraday. I don't think SPX can break above 7700. Retail traders bought heavily into SOXL last week, and retail positioning generally tends to move in the opposite direction to hedge funds and neutral market makers. This could lead to further selling from hedge funds. I'll wait until the US market closes and see how things look.

BTC spot inflows on Binance and Coinbase are strong, oil prices are falling, and NQ is rebounding. If it weren't for the bearish Anthropic news, I would have closed my shorts during premarket. My short profits have now given back some gains again, 🥀 and oil prices have just risen back up. I'll gradually close my shorts on Tuesday and Wednesday. I'll be getting ready to go long on Wednesday.

High-flying consumer stocks like KO and Visa definitely won't do well tomorrow either. Semis got crushed today on the Anthropic news, and tomorrow consumer and financial stocks could also sell off sharply, sending the indexes even lower. I'll keep holding my shorts. I'm just a bit worried that Trump might TACO before the Israeli election, but I think it's fine. He already TACOed over the weekend, and oil prices have fallen too. Oil might not necessarily fall much further from here

I just caught a short-term short on Anthropic on Binance 😂 The news is way too delayed. Even the Chinese news outlets I follow had already reported it, and I was already in the short, but these TG channels still hadn't posted anything. I guess I'll still have to use FJ and Bloomberg's websites😂

good✌️

Anthropic H1 net loss $80.7 billion|FJ

I’ll wait for news on Anthropic S1 before making a decision. I wasn’t at my computer just now and missed the best opportunity to close my short positions. I’ll wait for the news

This is why long-term Treasury yields and oil prices are falling, yet gold, stocks, and crypto are still selling off