June 8 Update

The S&P 500 rose +21% in 2 months and posted a 9-week win streak for the first time since 2023.  The Nasdaq was up 35% in the same period.  Historic move. 

That ended last week and the losses all happened on Friday.  The S&P 500 fell 2.6% on Friday and the Nasdaq plunged 4%. 

Bitcoin down 20% last week and down 53% from October. 

On Friday, stocks, bonds, crypto, and gold were all down.  It was bloody. 

South Korea tumbled over 8% last night. 

The setup was there for a volatility spasm.  Narrowing leadership, AI hype, trend following algos and passive investing, FOMO, option trades, dealer positioning, and momentum.  Anything related to AI and the buildout got hit hard.    

3rd strongest jobs report in 18 months was the match that sparked the selloff.  A stronger economy and possible higher inflation changed the hope for lower interest rates to possibility of rate increases. 

There was a lot written about how this could be the end of the bull move.  I’ve been on the bubble theme for a while, but I’m not sure this is the end of the bull move.  Yes an overpriced market.  But we could bounce back to record highs.  Especially if there is no follow through to the downside. 

If the chief drivers were 0 DTEs and short term traders together with dealers and algos, a bounce could happen. 

This week we get inflation reports and SpaceX IPO.