Ninja Trader Live: Senior Macro Strategist, Cross-Asset Trader 20+ years, Ex-SAC, Ospraie, Graticule and Circle Lane Capital
Joined February 2009
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Bonds ignored a 15% oil drop, soft PCE, and a dovish Fed voice.
Five of six conditions from October 1987 are back, and the long end has run out of excuses to rally.
New memo, a map not a forecast.
Link below.
What investors should be positioned for into Monday
•Oil is the key swing factor for the whole complex: a confirmed Yanbu/Rabigh hit or any sign of a US strike on Iran pushes Brent toward $120+ and re-ignites the inflation/rate-cut-delay trade; a Saudi damage denial with no strike fades it back toward $108-112.
•The Fed itself is likely a non-event (hold is priced at ~90%); the real risk events are Thursday's PCE/GDP combo and the oil tape between now and then. A hot PCE print plus elevated oil is the scenario that could push December hike odds materially higher and pressure duration-sensitive and high-multiple AI/tech names further.
•The rotation out of Mag7/semis into small caps and equal-weight continues to look unresolved, not confirmed as durable. Watch SOXX and MAGS for a bounce or a break of recent support ($460-470 / $69) as the tell.
•Gold's break below $4,000 despite an active war is a positioning/liquidity story (margin calls from the tech selloff), not a risk-off repricing. A reversal back above $4,075 resistance would likely need either a dovish Fed surprise or a genuine de-escalation signal on Iran, not just more war headlines.
•AI-financing stress (Meta's capital-raise signals, CoreWeave CDS at distressed levels, Oracle's negative FCF) is becoming a standalone credit-market risk thread independent of the Fed, worth tracking into Wednesday/Thursday mega-cap earnings.
What to watch this week
•Confirmation or denial of Saudi Aramco damage at Yanbu/Rabigh, the single biggest near-term oil catalyst
•Any sign of a US/Israeli strike on Iran, or conversely a real de-escalation/deal signal
•FOMC statement language Wednesday on oil-driven inflation risk and December odds, even with a hold fully priced
•Thursday's Q3 GDP + September PCE combo, the week's cleanest inflation read
•Microsoft, Alphabet, Amazon cloud revenue growth and AI capex commentary (Wed/Thu)
•BoJ decision and yen reaction Friday, plus China's Fifth Plenum (Oct 26-29) for policy signals
•Credit-market stress indicators in AI infrastructure names (CoreWeave CDS, Oracle FCF, Meta financing)
•Israeli election Tuesday and its implications for Iran policy
One day later. Incredible
@TylerHardt
From the PMI this morning:
"The result is the sharpest increase in selling prices for over four years to a pace that indicates consumer price inflation is likely to rise further above the Fed’s target in the coming months.”
Why again is the Fed not raising rates next week?
I put 14 calls on the record Sep 30 with @GaryBohm5 on the Metals and Mining Podcast. Time to grade them.
8 hits. 4 partials. 1 clear miss.
The break started exactly where I said it would: leveraged AI credit. What I got wrong was how cleanly the rest of the market rotated around it.
Full scorecard below
Forced selling in mega-cap tech masked a market where 68% of stocks actually closed green.
TL;DR
1/ A record $15B+ in forced MOC selling from SOXL and TQQQ drove an index-level loss while 68% of SPX constituents closed green: this is a passive-concentration unwind, not broad macro deterioration.
2/ The near-4-sigma bond rally pushed 10-year yields below 5%, but gold's failure to bid alongside falling yields and a weaker dollar is a loud warning that the flight-to-quality narrative is shakier than it looks.
3/ Brent above $114, Iran threatening Gulf energy infrastructure, and European natgas near 90 euros/MWh are feeding into financial conditions through the inflation channel and compounding the AI capex credibility crisis now showing up in credit spreads.
4/ With dealers modestly short gamma and the buyback blackout in force, any catalyst into next week's FOMC can feed on itself.
Regime: Fragile. Favor defined-risk structures over outright directional index longs into next week's FOMC and geopolitical catalysts.
Iran claims its biggest single day tanker toll of the Hormuz war. Brent is up about a point. The Fed is on a hold then hike path, not a cut path. VIX is sitting at 19. The gap between that headline and that price is the risk, not the all clear. You don't buy the first panic.
Morning note is next
Better to cancel the IPO than just have it botched?
Does this bode well for others looking to tape equity markets in coming months ?
When the front end stops rallying because the Fed is trapped and can't loosen because inflation is too high, then the real fun begins
Going live at noon with @SamanthaLaDuc on @NTLiveMedia Discord Channel for "Candles and Catalysts" where we will discuss what's moving the tape today.
AI credit unwind, Meta sell off, French OATS, precious metals drilled.
Come join!
discord.gg/4hCMEgZ3S
This was my shoutout to the @NTLiveMedia Discord channel this morning right before the open flagging that credit weakness which was driving bond strength was not going to be risk on for equities.
I'm in here regularly chatting with members about my market thoughts.
Come join, its free
discord.gg/Qwd5tKGYf
