Phyrex.Ni
Phyrex.Ni
No extravagance, no waste
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Today, I discussed this issue with my friends. First, let's see if the Strait of Hormuz will be fully open next week and whether the ceasefire agreement between the US and Iran can proceed smoothly. Especially watch the price of WTI; if it falls below $80, it will have a stimulating effect on the market.
It will most likely ease inflation expectations caused by rising oil prices. However, if the issue cannot be resolved satisfactorily and drags on longer, the damage to risk markets will be greater.
Nico投资有道
On Friday, after the US stock market closed and in after-hours trading, the Nasdaq plunged nearly 6%, which is probably the largest single-day drop since the tariff war in April last year. It sounds really scary.
The recent pullback has indeed been influenced by macro factors, such as strong US employment data, the market repricing the risk of interest rate hikes, and the upcoming SpaceX IPO next week, which could trigger a large-scale market sell-off.
But I think these are not the most important reasons. From the perspective of market price rules, it’s mainly because the Nasdaq has risen too much recently. Since the end of March, the Nasdaq has almost been climbing in a straight line with a very steep slope.
In the past two-plus months, the Nasdaq has only had 12 trading days with declines; the rest of the time it was rising. Naturally, after such a big rise, a drop is to be expected—respecting objective market rules.
Currently, the Nasdaq has broken below its 20-day moving average on high volume, and the VIX fear index has just risen above 20, indicating that the market has entered an initial stage of panic to some extent.
I wouldn’t say it’s time to bottom-fish yet; I’ll wait and watch when the market opens next Monday. After all, there are indeed some uncertainties on the macro front in June, and the probability of the market continuing to pull back sharply is quite high. But everyone should definitely not believe the scary stories in the market to become bearish, cut losses, or even short-sell.
I still believe the biggest risk this year is the IPOs of two large AI models. Before that, the market is unlikely to stop abruptly. More likely, there will be small to medium-sized adjustments that squeeze out the excess from the previous rise, allowing the next round of growth to start without burdens. For the Nasdaq, this might mean a pullback of about 5-10%, which would be a good opportunity to add positions.
Many people panic because they have gotten used to the market and AI semiconductor stocks rising relentlessly over the past two months without preparing for a pullback. But little do they know, this is not the historical norm, and the AI bull market will be no exception.
Looking at a longer timeframe, we hope the AI-driven bull market will be a wave-like progression, with upward momentum as the main theme, sector rotations, and varying degrees of pullbacks. This way, everyone optimistic about AI will have opportunities to enter the market in stages and benefit from AI investment dividends.
Today's situation is quite interesting. Although bitcoin:native dropped severely earlier, even falling below $60,000 at one point, the rebound after breaking below $60,000 was clearly quite strong. By the time the US stock market closed, Bitcoin had already bounced back to $61,000. The drop was notably less than that of the Nasdaq and S&P, indicating that this level is still quite attractive to some investors.
Unfortunately, I'm still out now and won't be able to continue bottom-fishing until Monday when I get home. But in the past two days, I've already started buying dual-currency products, although the amount isn't large. Once home, I plan to place dual-currency orders around $59,000 to see if I can buy in. If successful, I'll continue buying at even lower levels. As I've always said, I'm not very worried about Bitcoin's price. If it can still hold above $60,000 this time, it means my judgment is correct.
Besides Bitcoin, I'm more concerned about the issues between the US and Iran. After all, the main reason both the US stock market and Bitcoin fell today is that the non-farm payroll data showed a decreased probability of US rate cuts and an increased probability of rate hikes. This is not because the US economy is weak, but due to inflation expectations rising from higher oil prices. These expectations mainly stem from the blockade of the Strait of Hormuz. If it can be resolved quickly, inflation expectations will definitely decline.
This is also why I insist on shorting WTI. This is a problem Trump must solve quickly. Iran cannot wait, and neither can Trump. Time is running out for Trump. Not to mention the midterm elections, even the Fed meeting in June, which will be Powell's debut, is enough to worry Trump. Also, I've been watching Brent and WTI prices gradually converge, indicating the world does not believe the Strait of Hormuz issue is difficult to resolve.
I hope to see the Strait of Hormuz issue resolved next week. Even if the blockade ends, it will still take some time for oil prices to fully return and for US inflation to decline. But as long as the Hormuz issue is resolved, the market will inevitably form new expectations.
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Phyrex.Ni
Bottom-fishing bitcoin:native I plan to start next Monday. One reason is that I only get home on Sunday, and another is hoping the market can break out of the pessimistic trend caused by MSTR selling Bitcoin next week. If it really breaks out, there might be a rebound. If it doesn't and falls below $60,000, that would be a good opportunity to start bottom-fishing in batches. The method for bottom-fishing is still using dual currency, starting to try from $60,000, continuing the strategy of buying more as the price drops.
But honestly, I personally think $60,000 is not so easy to break below. Of course, my feeling might not be right. Just from the current data including spot ETFs, the panic sentiment has started to ease, traditional investors' selling has begun to decrease, and daily turnover rates have declined from their peak. This is why I say investors are gradually coming out.
Lately, the biggest concern is the war between the US and Iran, because if the Strait of Hormuz issue isn't resolved, the Federal Reserve's June meeting might be quite difficult, and the June dot plot won't look optimistic. Especially under high interest rates, it’s not impossible that some Fed officials might decide to raise rates to combat rising inflation. Although I think rate hikes are a more extreme measure, if oil prices keep rising and inflation continues to increase, there’s no better option.
If this really happens, it might lead to an economic recession, which could also be the best bottom-fishing opportunity. But the worry is that only AI is propping up the US stock market, while other sectors are struggling, making the index appear to rise but the reality is widespread distress and liquidity scarcity.
Today, a Democratic congressman criticized Trump, accusing him of responsibility for the soaring prices caused by the US-Israel-Iran conflict. He stated that due to the conflict, American households are paying an extra $750 on average. In many places, the price of a gallon of gasoline has nearly increased by 50%. This is also very tough for Trump as he prepares for the midterm elections.
Not buying WTI at $97 isn’t a big problem now. WTI is still fluctuating within a range, but it’s already clear that WTI’s rebound strength isn’t very strong, especially since the price difference between Brent and WTI is only $2. The market seems more worried about WTI than completely about Hormuz.
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I noticed many people don't quite understand and say that the non-farm payrolls (NFP) are bearish, but actually the NFP data itself is not bearish. This time, the NFP data can be considered quite good: the unemployment rate did not rise, and the number of employed people exceeded expectations. These data are all positive for the economy. So why did the market drop after the NFP release?
It's precisely because the NFP data was so strong that it dampened the Federal Reserve's rate cut expectations. Given such robust employment data, the Fed is unlikely to increase rate cut expectations. On the contrary, because the labor data is good, the Fed can hold out longer or even consider rate hikes if inflation rises.
Currently, the main culprit is the inflation expectations driven by the Strait of Hormuz situation. If this issue can be resolved, the inflation expectations caused by rising oil prices will dissipate. Therefore, the current focus remains on the price of WTI, continuing to short WTI.
Phyrex.Ni
The just-released non-farm payroll data is fairly decent. The unemployment rate has consistently stayed at 4.3%, indicating that the US employment situation has not significantly worsened. Although non-farm employment is lower than the previous figure, it still exceeded expectations. Additionally, wage changes were almost entirely within expectations. Overall, this non-farm payroll data is at least not bad.
Trump is now pretending to be clueless while fully aware. Today, both the US stock market and cryptocurrencies represented by bitcoin:native are falling, while US Treasury yields are rising across the board from short-term to long-term. This indicates that investors have very low expectations for a Federal Reserve rate cut. Previously, the US stock market consistently ignored US macro-political factors, believing that AI could drive the stock market to unlimited gains.
This recent decline might even increase the willingness of US stock investors to buy the dip, since the AI narrative still hasn't shown signs of a bubble bursting. Even the downturn is due to investors' expectations that US inflation might be uncontrollable, and the root cause of this concern is the Strait of Hormuz. As long as Trump hasn't resolved the situation at the Strait of Hormuz, oil prices cannot fall, and investors' worries will grow.
Of course, IPOs like SpaceX sucking up capital are normal. Right now, countless people are scrambling for SpaceX IPO allocations, and market expectations for SpaceX are very high. These are catalysts in themselves, but what really puts the market on the defensive is the rising inflation expectations, forcing many investors to abandon their long-term holding goals and switch to short-term speculation.
Phyrex.Ni
The just-released non-farm payroll data is fairly decent. The unemployment rate has consistently stayed at 4.3%, indicating that the US employment situation has not significantly worsened. Although non-farm employment is lower than the previous figure, it still exceeded expectations. Additionally, wage changes were almost entirely within expectations. Overall, this non-farm payroll data is at least not bad.
From my personal perspective. If your main sources of income are U.S. stocks or cryptocurrencies, then being a tax resident in a country or region with no capital gains tax is the best choice.
FinTax (加密税务答疑版)
Receiving a tax reminder only means that you have been flagged as suspicious by the system. Whether, how, and how much tax you need to pay depends on subsequent circumstances.
It is recommended to prepare in three steps:
1. First, review your overseas income situation yourself: what type of income it is, in which jurisdiction, and which parts have most likely already been reported back;
2. Analyze which type of income is reasonably taxed under which criteria. For example, year-end bonuses for high earners are generally not included in the comprehensive income of the current year but are more reasonably taxed separately;
3. Check if there are applicable tax credits, dual tax residency issues, tax treaties, and other related matters.
At the same time, maintain active communication with the tax authorities
The just-released non-farm payroll data is fairly decent. The unemployment rate has consistently stayed at 4.3%, indicating that the US employment situation has not significantly worsened. Although non-farm employment is lower than the previous figure, it still exceeded expectations. Additionally, wage changes were almost entirely within expectations. Overall, this non-farm payroll data is at least not bad.
Phyrex.Ni
In April, the US CPI and PPI data were both higher than the previous values and expectations, but the market had a better understanding of the PCE data for April. Although the annual rate data released today were also higher than the previous values, they were within the expected range. However, compared to the increases in CPI and PPI, the rise in PCE data was not significant.
Even the monthly rate data were lower than the previous values. Both the core PCE monthly rate and the PCE monthly rate were lower than before. This is mainly because the weighting of PCE differs from CPI; shocks like energy, gasoline, and rent are more easily amplified in CPI.
CPI reflects out-of-pocket prices for urban consumers, while PCE covers total personal consumption expenditures, with weights adjusted according to changes in consumption behavior.
Simply put, if oil prices rise, CPI directly shows "gasoline prices rose a lot," while PCE also considers whether consumers have changed their actual consumption patterns, such as driving less, consuming less, or switching to cheaper alternatives. Therefore, the same price shock may have different weights in PCE.
Additionally, the Federal Reserve focuses most on the core PCE data, which is still acceptable, having only risen 0.1% compared to March. The market should temporarily breathe a slight sigh of relief.
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This purge of existing users was probably anticipated. The current situation is just like on September 4, 2017, when all cryptocurrency exchanges within China were shut down, and gradually cryptocurrency exchanges were banned from operating in China. It's been almost 9 years now, so what was the outcome?
Hard blockades are very difficult to enforce; ultimately, these "exchanges" just relocate overseas. Although the main entities move, the primary customer base remains the same people. Then they start aggressively shutting down OTC, and some OTC activities are even directly criminalized.
Of course, it cannot be denied that after long-term propaganda, cryptocurrency within China is still treated like a flood monster, always associated with scams. Every now and then, you see self-media claiming bitcoin:native is a tool for Americans to harvest the whole world. Maybe in some time, AI will face the same treatment.
I believe that if the AI sector ever experiences a significant correction, many passionate young people will come out to protest.
Received a message from @jason_chen998 before going to sleep and noticed that ethereum:0x7977bf3e7e0c954d12cdca3e013adaf57e0b06e0 has doubled. Is this the prelude to the World Cup starting?
Opinion has been quiet for a long time, but finally chose this way to remind everyone that the battle for dominance in the prediction market is about to begin.
The WTI at 97 dollars hasn't been bought yet. Although I don't necessarily believe everything Trump says is true, it currently seems that the US and Iran are indeed trying to avoid further escalation of the war, and the Strait of Hormuz is the bargaining chip in this conflict. The US is blockading Iranian ports, Iran is blockading Hormuz, but Hormuz does not belong to Iran.
Today, some friends suggested that the US might be deliberately raising oil prices to devalue the dollar. I strongly disagree with this view. Indeed, if oil prices rise to 150 dollars, it means one dollar can buy less oil, so the dollar is relatively devalued against oil.
However, US debt, wages, taxes, military spending, social security, healthcare, and national debt interest are all denominated in dollars, not paid in oil. If the US owes 150 dollars, it doesn't mean it can repay with just one barrel of oil because oil prices have risen to 150 dollars. The US repays debt in dollars, not oil.
Moreover, high oil prices are not purely beneficial to the US. The US still imports a large amount of crude oil, especially different types needed by refineries. The US is a major oil producer but also a super consumer. High oil prices benefit shale oil, energy companies, and some export chains, but the costs are passed on to gasoline, diesel, aviation, logistics, agriculture, manufacturing, and ordinary consumers.
Therefore, high oil prices are not a perfect tool for the US to "plunder the world"; they are more like a double-edged sword.
Although it can hit energy importers like China, Europe, Japan, and India, it also pushes up inflation in the US. The inflation data in the past month has clearly rebounded, and with rising inflation, the Federal Reserve finds it harder to cut interest rates, and the US fiscal interest burden becomes more difficult to ease.
So, oil at 150 dollars is not necessarily a cure for US finances; it might actually be poison. Therefore, I think Trump, whether from the perspective of the midterm elections or the stock market needing to rise, will not allow oil prices to stay high for long. At least at this stage, high oil prices are equivalent to Trump digging his own grave.
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Phyrex.Ni
This time, I added short positions on WTI at $93, $94, and $96 respectively. Actually, thinking about it now, I was a bit too optimistic about $85. Although I expected some fluctuations, since I rarely do short-term trades, I didn't have the concept of taking profits early and exiting. This led to another round of rollercoaster trading. Although overall I am still profitable, I could have done one more round.
Of course, these are not the main points. The main point is that I still believe there is no problem with shorting WTI. Even now, Trump hasn't said he doesn't intend to negotiate, Iran hasn't escalated the conflict further, the US midterm elections are coming soon, and the blockade of Iran's coast is also critical.
In this situation, I think the more both sides are entangled, the more it indicates that the negotiations have reached a detailed and critical phase, with a stance of no concessions. Most likely, the rest will be a grind. Be sure to watch out for liquidation prices; I am still above $120.
The current average price is $93.48, with a current loss of 29%.
Investors from BlackRock and Fidelity are still leading the sell-off, but the volume of selling is relatively small, at least much better than during the previous market panic. Currently, it's basically investors who bought ethereum:native in the last two to three months who are exiting. The sentiment from MSTR selling bitcoin:native has not yet dissipated, so we still need to wait a bit longer.
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Phyrex.Ni
Monday's data for ethereum:native was still pretty good, mainly because ETH had already dropped below $2,000 by Monday. The reaction from traditional investors was quite decent, with BlackRock's investors selling the most, while Fidelity's investors did some bottom-fishing on Friday. It's estimated that those bottom-fishing investors ran on Monday. Currently, ETH almost has no independence.
Of course, this time bitcoin:native showed independence, but I guess no one wants that kind of independence to happen to ETH. However, putting all hopes on a single commercial company and expecting that company to never sell any BTC or ETH is itself unscientific. Let's just take this as a demystification.
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