Pre Market Thoughts - 24 Aug 26 In a nod to Bessent, 30Y yields have remained capped under 5.3%, however we see the 10Y starting to creep alongside its upper bound of 4.7%. Later on today, Bessent has another press conference on the tools on the economic blockade of Iran. Interestingly, the mood seems to have shifted on Iran with the civilian leadership breaking ranks and seeming to press for peace. WTI is about 1% lower. Over the weekend, BABA broke news of its gigantic 10B stock placement. This is the largest secondary placement on the HKEX and allocation was given to Long Onlys and SWFs. Non of them US based. My read on this is a little more nuanced. First of all, the facts are that BABA has recently bought back stock at about ~95 average while on this placement they are selling it at $115. I personally dont think they are in the business of trading 10% ranges, hence the commitment to utilising the cash for capex is probably a recent decision. One that they decided to go all in on; possibly after seeing the potential for a 2y break even on payback period. Next, on the allocation dynamics, it was given to LOs and SWFs; both of which investor groups tend to hold pretty long, hence i dont think there is much new supply. Most holders of BABA are already spiritually broken and have exited the stock - Look, even Burry famous for buying "VALUE" has given up on BABA. The remaining investor base are probably a mix of delulu and maybe uncles who dont know what they are buying. Which is great. Overall, my opinion on this is rather sanguine - i dont think this is as bearish as the bears think nor a bullish event. The right question to perhaps ask is, are you the right investor to own BABA? Next on Asia trading, KOSPI is down 3%, predominantly dragged down by $5930 (Samsung) which is down about 9%. NKY is down 0.5%. Interestingly, SKHX ($0660) is only down about 2%, hugging the 1.7m KRW support levels. This is probably the manifestation of the effect of the buybacks anchoring the stock. On a 9% $5930 dip, $0660 would usually be down 12% or more. The memory buybacks are doing their thing. On pre market trading, both MU and SNDK are down about 3% from trading in sympathy with $5930. Next on precious metals - this and BTC have been the strongest outperformer since Bessent's words. Crypto Alts have ran extremely hard as well. In my last note, i mentioned about multiple alts seeing a big rerating - this has happened over the last 2 days. No tickers here because these things are very illiquid. Though that should have been a hint for the adventurous amongst you. Next up, I would start advocating for some amount of caution. On saturday we saw a leverage wipe out on alts. We had the knee jerk move across most alts. Next we will be seeing a differentiation in performance as some alts start grifting and others hold true to the rules of the game. Your job is to identify which is which. Next is to risk manage. Over the weekend, NVDA also announced price hikes. The direct read through is that this is mildly bearish for Neos because they need to buy the equipment. While that is true, given the compute shortage, it is far more likely that Neos will take the chance to raise pricing across the board instead. Overall not a factor. However, it is important to note that since last week, after Citadel's sales whiplashed the momentum funds, it has triggered one of the largest derisking again in momentum across the board. To note, semis have underperformed so MUCH now that, software is moving into the momentum basket and semis are moving on to the short basket on the 3m time frame. This is something to watch out for. The next leg of the market is heavily dependent on liquidity. I think on the fundamental side, semis have delivered. However, what truly matters now is how much the Fed and the Treasury eases before the mid terms. I am going to be cynical here and say that they would try their best to pump the system as hard as they can. This week we have NVDA earnings and Jackson Hole that will be the main movers of the market. (Use the calendar app on http://terminal.gambit.zone to easily keep track) - The calendar ALSO has crypto token unlocks btw - eg $H has 8.6% of tokens unlocking today. There is also a new chat function for people to talk and share ideas. If you would like a private room to invite your friends in to chat - please let me know. I will be giving out this free room feature for this week only. The idea is that you should not have to toggle between TG, Discord to talk, find information and to chat. Good luck!(degentrading)