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Thursday, July 30, 2026

Civil War at the Fed: Trump vs. the Money Masters – Dirty Laundry Edition

$1 trillion in equities wiped out in an afternoon? You might want to fact check that headline.  

I was only pissed that I couldn’t keep working outside— summer remodel project. Bond vigilantes should be out on the lake, not throwing tantrums because they want higher rates – ahead of the midterms. 

Here’s the real story - The Story You'll Never Hear Reported: 
There is a civil war going on at the Federal Reserve: 

  1. Yesterday’s meeting was billed as a rate “showdown” a week ago.
  2. Trump fires back: praises Warsh for the Fed role, accuses the Board of partisanship, takes aim at the Fed’s inner circle (many sources).
And guess which side the talking heads are on? 

The Pivot Nobody Noticed – Several Actually 

Industrials—the supposed “broadening out” sector rotation—got steamrolled in a nasty midday reversal. This started well before Kevin Warsh opened his mouth. It began with the unwind of Apple and the Too Big To Fail banks.

  • Dow component: Apple ($AAPL) – only remaining Mag7 leader, high-flier
  • Too Big To Fail banks: Goldman ($GS), JPMorgan ($JPM)
  • Dow component: $CAT (Corning $GLW already unwound earlier in the week)





In hindsight, while everyone was supposed to be watching Kevin Warsh and the big financials (Mag7 mostly), the previous sector rotation was quietly being unwound. 

Stocks in focus – the only ones that can stop the bleeding: Big Tech, of course

1. $VIX to plummet - now that the FOMC is set to remain on hold. Same as the ECB (this morning). 

2. Microsoft to replace Apple - in an ongoing game of mag7 whac-a-mole.  

3. Oversold Sectors - Semiconductors, and Big Tech to snap back.  

4. Watch of stealth unwinds crashes in heavily pumped sectors, Energy, Health, Industrials  

 $XOM trades into a right shoulder  


P.S. The idea that yesterday's FOMC statement, and Kevin Warsh's excellent news conference was the reason for yesterday's washout, is absolutely ludicrous, but that's the red herring argument the talking heads are trying to make fit this morning - Gloomberg Surveillance calling Warsh "evasive" - while pointing to higher long term rates - that was good for a morning laugh🤣  

Enjoy your summer   

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Tuesday, July 28, 2026

A Canary In The AI Coalmine

 The Dust Continues to Settle on the S. Korean Semiconductor Crash.

Ed Dowd makes a good point, and I think we're bound to see a similar unwind in the US - when the basket of AI driven stocks which accounts for 50% of the market gains over the past several years, unwinds. Hey, remember when NVIDIA used to lead the AI rally, then Semis, and a hand full of industrials names eg $CAT? Yeah... until FOMO turns to fear. Corning (reported this morning - stock -16% in pre-market?  So much for that bullish industrials narrative.

Getting back to the AI crash at hand

When they decide to pull the plug - it's usually on a Monday - this time it was Tuesday

Last night's crash in S. Korea was yet another orchestrated rug pull (bid lowered below support)- possibly orchestrated by the same offshore (Chinese) traders I alerted to a week ago [Chinese Reddit Traders Team Up To Help Create The Perfect Storm].

Look closely at the embedded chart, to see where the bid was lowered- just below support. Textbook. 




Thankfully I never got bullish on the KOSPI - I avoided catching a dreaded falling knife, but once the dust settles I'll be on board... because I trade whatever moves - not the $SPX. 

What else is moving: Tesla, SpaceX, AI stocks, Tech (as usual). These 2 are only indicators for the hyperscaler space; I don't short individual stocks - maybe someday... but I'm sure my accountant would disapprove. However, if I had shorted Tesla, you can bet your ass I would've already covered that bet. 

We're getting very close to my downside support. 

The target - called out, just before Tesla reported 

In Focus - The Rest of The Week: 

  • Wednesday's FOMC announcement should drive the $VIX back to normal levels. I'm not even sure what's holding it up - to tell you the truth. This must be one hell-of-a bear trap..?  $MSFT, $META, $LRCX LAM, $QCOM QUALCOMM,  $ARM    

  • Thursday more big tech earnings : $AAPL Apple, $AMZN, $MPWR (monolithic)
  • Friday Energy $XOM, $CVX 

After so many rug pulls, and the lack of excitement around the AI narrative, I'm only looking for another relief rally to sell - unless we see a sentiment shift - continue to sell the rips. 





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