We lost a lot of momentum this week (Monday, May 11).
Memory/CPU (bull) and Crypto/Nuclear (bear) both made final thrusts higher and rolled over. Space pushed a little further but the SpaceX IPO is on deck.
Last time I noticed this was early January. We saw everything bid at the start of the year but the riskiest stuff (crypto, nuclear, space) ran out of bids very early. The metals blow-off top was at the end of the month. It wasn't bearish for everything though. The AI trade, especially memory and optics, grinded uninterrupted until the conflict w/ Iran.
We haven't had a sustained broad market rally since 10/10. The week all things momentum died. Crypto, nuclear, and even IGV have still not recovered the October highs.
Anyway, my frustrating observation is that we're still in an extremely narrow market, and anything that isn't in the AI infra theme is failing to break out.
Who knows what the next headlines will be but they won't be the real reason for weakness. The weakness is already here. We printed record returns out of the 3/30 lows, and probably went too far too fast on the best stuff. If crypto cycles have taught us anything, we need to see these core ideas in AI chop sideways without drawdowns (healthy but boring). That's probably the window for "alt szn" to rerate other themes across the market. Idk what catalyzes it, maybe just saturation.
Crypto is extremely weak outside of US trading hours. Not great, but it's not just one coin, and it's not just crypto. It will be like this until we see new capital flows, and they almost certainly have to come from AI stocks. Feels hard to believe but the market will want an even shinier new thing eventually. When that happens, it will put all ideas on the table again (robotics, longevity, even crypto).
It's frustrating to have dead capital underperforming but I'm not smart enough to time it any better. I think we have a few themes in this bear market that are asymmetric and worth the r/r to vault. Sizing just needs to be smaller so we can grow P&L while we wait.
Hope this steam of consciousness is helpful when you open the app this weekend and check price, bad price.
Seeing mixed signals in the first week of this market and I can't tell if we're just cooling off or about to get rugged.
De-risked calls and other volatility/time-sensitive positions here. P&L secured. Core + cash to feel it out.