TL;DR
Long the December hike near 76% priced; the inflation data keeps building and I'm not fading it.
Nasdaq led the sell-off on AI valuation fears; I treat this as a positioning flush until credit confirms otherwise.
Dollar thesis challenged at 101.8, under my 102 invalidation; one more soft session and I change my read.
Duration stays my hedge while 10Y holds 5.10 and rallies into risk-off; bear flattening is the signal that flips it.
SPX-Bitcoin correlation at 0.59 means crypto is no hedge here; copper crowding flag still live.
Where We Stand
Yesterday I said I was long the December hike near 90% and that duration was still my equity hedge. Today's close keeps both honest. The Nasdaq underperformed as the rout in technology, AI, chip and memory stocks continued, with reports that Anthropic's valuation expectations had been lowered to USD 1.5tln from USD 2tln adding to concerns over elevated valuations across the AI sector. The 10Y caught its haven bid intraday then gave it back to oil, so my long-end thesis from 14 October is now challenged. The yield still sits at 5.10 but fell 9bp on the day, so no bear flattening yet. I'm keeping the view alive on that level. The dollar thesis opened 12 October is also challenged at 101.8, below my 102 invalidation, and one more soft session changes my read. The copper crowding flag stays live at the 87th percentile.
