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)

Hey, anybody know why the Dow Jones futures crashed at 53,000? #DowJones pic.twitter.com/cnphpRDSl2

— Veteran Market Timer (@3Xtraders) July 29, 2026

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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