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Wednesday, May 13, 2026

$VIX Volatility Sold (Short) Market's Recover - Pure Manipulation In Broad Daylight

Yesterday’s 5% flash-crash out of South Korea wasn’t just another headline — it was the kind of black swan that exposes how fragile the AI narrative has become, when a social media post from a government official pulls the rug in the middle of the night - right at the 8000 target (7,999.67). Update on that situation in a moment... 

 South Korean Kospi - picture tells a thousand words. 

If you've been following along for the past few month, then you already know how the powers that be love to short the $VIX [They Can't Short the VIX. Here's How They Do It Anyway], and if you're bearish, (or you're name is Michael Burry) going into another Monthly Options Expiration (Friday), this is exactly what you're up against. 👇   

$VIXY (ProShares 2X leveraged VIX Short-Term Futures Bull) - Hammered at resistance.  This isn't just an ETF wrapper they're shorting. When BIG MONEY shorts the $VIXY ProShares is forced to sell front-month VIX futures to cover. VIX futures drop → spot VIX drops → SPX algos smell lower vol and go full risk-on. Exactly what we saw yesterday.  

Following the $VIXY since 2015

Getting back to what took place overnight in S. Korea; The spillover into the Nasdaq left one of the talking heads at Bloomberg in disbelief that a "Facebook post" (coming out of S. Korea)", could send US markets plummeting, but by afternoon the Nasdaq had lost nearly -2%. But several markets rallied as if nothing was out of the ordinary. Dow higher of course - has become the new normal on days like this. No sooner than the NASDAQ is crushed, algos pivot to the Dow.   

I fired off several Tweets alerting to the triple top on the $VIX (@ 19). Market's quicky recovered. Semis were bought at support. It was a good swing trade. 

$SPX closed in the green as if to say [fill in the blank]  At this point all I can do is point to the absurdity, swing trade it, and have a good laugh, but what really keeps me up at night is not the market manipulation in S. Korea, but the bubble market in the west. Even this morning Bloomberg continue to point to semis as the only game in town, perhaps parroting what they're seeing on the terminal.  

We're in uncharted territory, trading a highly bifurcated market, where compound gains outweigh valuation, or common sense. What could possibly go wrong? 

We haven't traded in a normal market environment since the 2000 bubble — not even close. Every crash is met with more liquidity injections ( they don't need to print the money - just push buttons) markets panic-bought to re-inflate the bubble. Wash, rinse, repeat — until it doesn't work anymore. But as long as the AI story is intact - bulls are happy.  

How much longer can this continue? Probably longer than you might think, and at least into Memorial Day, as volume continues to dry up, is my best guess.     

P.S. May 6th - a story that received little attention was "Lawyers at M&A law firms among 30 charged by US in insider trading scheme" (including M&A lawyers from top firms) in a decade-long insider trading ring that front-ran nearly 30 major deals for tens of millions in profits. (reuters.com)  Buried the same day it was reported. They don't want to open that can of worms. 

P.P.S. Sharks are now running the table in the daylight. 




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Tuesday, May 12, 2026

Did the AI Bubble Just Pop? Black Swan Spotted Overnight

Semiconductors continued to spur the dead horse $SPX (UNCH) market on Monday — with the $SOX touching 12k pinning the investor stupidity meter in the red (fuckwit levels). Latest pump job: $NVTS +30%.

Then came the Black Swan of the year.  Most investors haven't even grasped the full implications... let alone heard the story reported accurately. 

 A top South Korean policymaker on May 12, 2026, proposed a "citizen dividend" paid to citizens funded by taxes on high AI company profits. This proposal, targeting AI-driven gains. Officials later tried to clarify it would apply to "excess tax revenue" rather than a specific new corporate tax", but judging by U.S. futures, the black swan has already flown the coop.

What's to keep the full socialist Mayor of New York City from doing the same thing at the New York Stock Exchange ... and maybe that's why they just built a second NYSE in Texas - another fact most investors are being kept in the dark about.

Another fact you've been left in the dark on is the fact that the semiconductor trade was propagated in Asia as a classic sequential pump job — exactly like we saw in crypto — with the Asian traders running the table.   

A couple blogs back I laid out the two obvious pins that could pop this AI party: Xi holding one, the Fed holding the other. 

"That puts the pin that may burst the AI bubble directly in Chairman Xi’s hand. And with the Middle East cutting off Chinese oil shipments (a blockade — an act of war), it’s a possible black swan. As of today, investors are none too concerned.

The Fed holds the other pin. Higher rates to fight inflation seem unlikely now that Trump's guy is in — but I guess it'll all come out in the Warsh. 😅" [link]

Now S. Korea just dropped a third. And who's to say the new full Socialist Mayor of NYC, doesn't follow suit? Why else would they be building a duplicate $NYSE in Texas?    

 I correctly identified the semiconductor trade as being propagated in Asia - calling it out as a ". Classic sequential pump job, just like we saw in the crypto space - in fact I think Asian traders are running the table." [link], 2 Days Later A S. Korean Black Swan Sends Market Futures Roiling, and now you see the fallout, and the bull contortionists arguing with the tape 

I actually had bullish trades to get to, before the black swan hit the tape - next time. 

Take Care, 

AA

P.S. Bubbles don’t burst in a single day. Even after the top, we’re going to see explosive bear-market rallies. Semis are still a relatively small sector — we’ve got much bigger fish to fry. 

P.P.S. Alternative title for today's blog: How The Guy Who Was Right One Time Became The Poster Child For Perma-Bearish Failure (19th time wrong in a row edition) ðŸ˜‚  

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