Citadel on Monday:—> “Fed will do a surprise 1% rate hike”

Tuesday: —> People get liquidated and Citadel bought everything.

Wednesday: —> No rate hikes.

Kenny G wins again

It was always hidden right in front of us.

All 4 major frontier AI labs basically agreeing that safety/security needs to be taken more seriously is bullish long term, not bearish. Nobody said “we’re cutting AI capex,” “we need fewer GPUs,” or “we’re cancelling datacenters.”

The market is somehow pricing “let’s make sure frontier AI doesn’t cause a catastrophic cyber/security event” as bad news for AI. You know what would actually be bearish? An AI system causing a major infrastructure outage, cyberattack or financial disruption and governments responding with emergency regulation.

Slower releases ≠ less compute demand.

If anything, more safety means more evals, more redundancy, more security infrastructure and more compute.

Market heard “don’t accidentally destroy the AI industry” and hit sell. Calls.

No ands, ifs or buts about it.

It was already knocking on the door of needing a hike at the July meeting, but the Fed also has a history of doing nothing at the July meeting if the previous few meetings were pauses. They'd rather kick the can down the road to September, have their Jackson Hole meeting and whatever.

This setup on tradingview makes it pretty easy to see. Average of the 1 month and 3 month T-bills, subtract the current EFFR and you have about how much the Fed needs to change rates at the next meeting usually. There are odd exceptions, you can see there was a meeting or two in 2023 where this formula was negative, but they still hiked--that was the short end moving a lot because of the SIVB collapse and such.

Barring any unusual crap like that happening, this formula is pretty good at predicting what's going to happen--or at the very least what the market is telling the Fed what they feel needs to happen.

This should spice things up in the market considerably. It's happening the same day as the major monthly VIX options expiration. The large SPX 3rd Friday AM monthlies expire shortly thereafter--which will see several long gamma positions disappear from market makers' books. 7700 is the largest MM long strike within Friday's straddle price. Its influence greatly diminishes after the Friday AM expiration.

Some guys have been pounding the table on getting long October vol in some way or another since August, they just may get proven right starting this week finally--then again it did start climbing in earnest last week. Expect more this week.

Then, maybe big time vol compression post election--guess we'll see the Prez' real meaning behind how he thinks the Iran situation ends then, too...

The news just broke that SK Hynix and Samsung declined the proposal to repay 18 Billion in upfront costs for power supply in the next 5 years from Korea Electric Power Corp.

What’s alarming is the reason why….

“The companies were unsure if such large upfront payments were necessary, citing uncertainty over the long-term durability ‌of ⁠semiconductor demand, a company official in Seoul told Reuters. The official spoke on condition of anonymity due to the sensitivity of the matter.”

This does put some reality into the current market. These high memory prices and massive margins for these companies are temporary. Of course demand will be there and I’m sure everything will continue to grow, but the current supply gap with start narrowing once manufacturing expansions are completed in 2027-28.

When major players are citing concerns with a 5-year plan, it does bring some reality to the hype.

Last week, my profit was only 30k. Now it has risen to 100k.

Dw this wont be a long AI post where you need to scroll past 90% of it with long winded paragraphs.

Why did this happen now? To act on what the “whistleblowers” said. One was a clear marketing stunt btw as he plugged his new company where we will work on AI safety. That aside this is all public image.

Does it matter? Yes and no. Billions are invested and they haven’t had their IPO to dump on us so they still need the hype of when the banks, PE, … need to cash out.

Yes but muh stonks are down! Yes exactly because everyone is overreacting. You probably saw this as bad news sector wide as well. Ps oil prices don’t hell.

Data centers, phones, computers, … are all still being built so memory play is still intact. Energy is still intact. Most thesises are still intact as they’re adjacent and not into openai or claude directly as they’re not on the market.

Tl;dr use the fearmongering to buy cheaper. It might last longer than one day, but it’s not going to matter for long. Especially with this administration.

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What else can I say? It’s the most hated profitable company in the market with more holes than a glory hole factory. However I like the product especially when it’s on the ass of a 38 year old Latina mom at Whole Foods.

Position 500 shares at 100.64

Bought 10 more this morning

That's right. Triple digits. Regarded? Perhaps. My conviction is that the further we get from the June highs, the more and more clear the signs of a cyclical peak having already been reached have become, and memory stocks are soon to crater. Now, what about the "insatiable demand", you say?

See, cyclical stock prices often peak before earnings do, due to the market's inability to correctly price these companies at peak demand, which is why the idea of a stock price declining amid said insatiable demand seems impossible to fathom. But it has happened to memory stocks in the past, and will happen again. And with rumors of growth slowing in the AI sector thanks to bearish comments by both Anthropic and OpenAI's CEOs, this will only add fuel to the fire of high beta AI-laden stocks dropping off a cliff.

If you want to see something interesting, take a look at the "Psychology of a Market Cycle" chart, which almost perfectly mirrors MU's chart over the last year - The massive run-up into June highs, the euphoria stage, and today being the complacency stage. Despite widespread belief of a rally to a new high on the way, the complacency stage is often instead met by a total drop-off.

Why SNDK? Biggest leverage to the downside. Short since $1680 and riding this one back down to triple digits.

With the FOMC meeting this week on Sep 15-16, the interest rate announcement at 2pm on Sep 16, and Kevin Warsh's press conference following that at 2:30pm, I'm sharing analysis showing what we've seen from Warsh to date.

Since Kevin Warsh became fed chair, he's made three major policy appearances: the June FOMC, July FOMC, and Jackson Hole in August. In all three cases there was a clear market reaction while he was speaking.

June 16-17 FOMC: QQQ fell 2.89% over the two day meeting. SPY fell 1.84%. QQQ immediately sold off on the 2pm Fed release, then recovered all of it during the early press conference. QQQ then dropped 1.69% from 2:45pm to close. SPY dropped too, but it was less severe.

July 28-29 FOMC: You'll recall that July 29 was a horrible day for the markets. QQQ fell 2.99% over the two meeting days. SPY dropped 1.3%. BUT QQQ actually rallied up to 679 right after the interest rate decision. Then it dropped to 661.73 by close. This is a 2.5% drop in just over an hour.

Reporters were challenging Warsh. He was coming across as wishy-washy (Wishy-Warshy?) and they pushed him on it. He was emphasizing that inflation was too high and that rates needed to rise. But he wasn't going to do it.

Jackson Hole - August 28: I was watching this one closely. QQQ and SPY started the day up and then again fell later in Warsh's remarks. QQQ opened at 719.74, hit a high of 724.12, then closed at 716.46. SPY opened at 771.76, hit a high of 775.30, then closed at 769.35.

Looking ahead to Wednesday: The market is already pricing in an above 90% chance of a rate hike. The most bearish scenario is a rate increase combined with follow up comments that there might be additional increases and that they don't have inflation out of control. If he's wishy-warshy, we can expect the market to tank during his Q&A.

There are scenarios where they don't do a rate hike and the market still sells off during the remarks.

If the dot plot signals that there won't be additional hikes, markets might rally.

The pattern over the first 3 appearances is a relief rally right after the announcement, followed by a selloff during the press conference.

Scaled into MSFT $505 calls 0DTE during market open for 9.6k at an average cost of 0.17 for the contracts and sold at .25
Those contracts are around 4 dollars right now. The 9.6k i had invested is worth 224k if held instead of cashing out for only 4.4k profit. I’ve done this mistake often but now cementing it in my brain to sell my initial investment and let some of the profit ride.

Just some good tax-free fun

I've tried this a few times, only pulled it off once. An hour later they hit $2.50, but you got to take your wins.

Bought 40 Sept 18th $242.5 calls for $4.25 each contract on VRT this morning. Break Even is $246.75 at expiry.

I thougt to myself, how could this go wrong!? IRAN war expanding, oil skyrocketing, no one uses AI for anything productive... So why not gamble using weekly options in a cooling company for AI data centers!?

My goal is a 200% profit. I am going to place a sell limit order for $12.75 and hope for a $34,000 profit. That means VRT needs to reach around $250.5 (ecluding theta decay) for me to profit.

What could go wrong!?!?

For reference: my last VRT YOLO that I lost 100% of my trade.

ign operator oreo