To The Moon

Muthu boy  enjoying breakfast and trying out the famous 豬肝 recommended by @InverseCramer  , priced at $4. 

Dabao that hawker pork liver home  for @Optionspuppy  

Yesterday’s Jackson Hole speech showed that Walsh is significantly more hawkish than the market expected, rather than dovish. Right after the speech, the U.S. dollar and Treasury yields surged, while gold and Bitcoin dropped sharply.

​While these initial moves were normal, the market subsequently displayed major contradictions:

​Cloud giants like $Amazon.com(AMZN)$  , $Alphabet(GOOG)$  , and $Microsoft(MSFT)$   rallied strongly, while semiconductors and growth stocks slumped. This semiconductor pullback was heavily pressured by $Marvell Technology(MRVL)$  ’s post-earnings drop (despite beating numbers, sky-high expectations and questions surrounding its Google partnership triggered a sharp sell-off) alongside profit-taking on $NVIDIA(NVDA)$  after its recent spike. As we've noted, cloud providers and growth stocks represent "future money," whereas semiconductors represent "present money" because cloud players currently run on negative cash flow and their capex subsidizes chips. A hawkish Fed should penalize future earnings, making this cloud rally somewhat illogical. However, we can explain it as a rotation away from hardware/chips, alongside the market stubbornly clinging to the belief that these cash-flow-negative, capex-heavy cloud giants still offer defensive value.

​Treasuries and the broader market took a dive, yet the U.S. dollar held firm. At one point, I thought a strong risk-off sentiment had kicked in, but the VIX didn't budge at all. This is better explained by widening U.S.–Japan or U.S.–Europe yield differentials driving currency carry trades.

​Despite these contradictions and divergences, the reactions weren't overly dramatic; they remained relatively mild. This points to a neutral market with no clear bias—everyone is just trading their own book.

​My read on this is that capital rotated out of overseas markets and gold into the U.S. dollar. However, this capital has not yet flowed into either the U.S. Treasury market or U.S. equities, leaving it sitting on the sidelines in cash and waiting. This creates a bullish capital setup for our upcoming trades.