It’s been 10 years since I have written something that long something (with AI concealing all my f-words rage) like this, but I am beyond pissed off at how the market has become. I didn’t lose a whole lot today since I shorted MRNA today with 3x leverage as my winning trade while getting burnt by all MU, SPCX, PLTR, MSFT, but I am just so angry thinking if I didn’t make that MRNA trade, my wife would have killed me.
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Dear Portfolio Managers,
Are you actually managing risk, or collectively creating it and charging management fees to navigate the consequences?
Let’s review Friday.
The US 10-year Treasury yield had declined. Oil had pulled back. The dollar was moderately stronger. CPI exceeded expectations by just 0.1 percentage point.
Yes, PPI was considerably hotter. That warrants caution, not indiscriminate selling.
Thursday’s recovery had offered the market an opportunity to stabilize after several consecutive sessions of selling.
Instead, Friday brought another rotation into financials, healthcare, and real estate while technology got hammered.
QQQ lost critical support. Micron declined sharply. The Russell 2000 weakened. Even sectors receiving rotational capital struggled to sustain their rallies.
Congratulations. You managed to damage market structures without establishing sustainable leadership elsewhere.
And it’s rather rich to complain about Trump moving markets through his statements when your constant sector hopping can inflict even greater damage. At least he has skin in the game; you’re managing other people’s money.
1. You’re Portfolio Managers, Not Beginners Trading One-Minute Candles.
Watching institutional money jump between sectors resembles a beginner trading one-minute candles.
They see a $10 unrealized loss, panic, close their position, and chase whatever is moving.
Except you’re doing it with billions and calling it portfolio optimization.
Technology weak in premarket? Sell.
Financials outperforming? Rotate.
Healthcare gaining momentum? Rotate again.
Tomorrow’s premarket reverses? Change your mind.
If your conviction changes every morning, perhaps you never had an investment thesis.
2. Friday Was OPEX. Did Anyone Consider Market Structure?
QQQ lost the heavily traded $730 options region, broke $720, and approached $710.
With negative dealer gamma exposure, falling prices can trigger additional hedging-related selling, amplifying declines. The precise gamma-flip level and dealer positioning require more than options volume alone to establish.
Add institutional selling, broken support, and systematic responses, and the feedback loop becomes dangerous.
You have sophisticated derivatives analytics and liquidity models. Perhaps use them before collectively rushing through the same exit.
3. Your Sector Rotation Didn’t Even Work.
Financials initially strengthened. Healthcare attracted capital. Real estate participated.
Then portions of those sectors weakened too.
Meanwhile, technology lost important support.
You weakened the sectors you abandoned without establishing convincing strength in the sectors you entered.
Diversification isn’t an investment thesis. And everyone transferring risk simultaneously doesn’t necessarily reduce market-wide risk.
4. JPMorgan and Bank of America: Show the Math.
JPM and BAC both missed Q3 earnings and revenue expectations.
JPM reported adjusted EPS of $5.75 against $5.94 expected.
BAC reported $1.08 against approximately $1.10–$1.11 expected, alongside weaker trading revenue and a $1.2 billion regulatory settlement.
Meanwhile, institutions were rotating capital away from semiconductor companies delivering exceptional earnings.
So we’re selling companies crushing earnings expectations to buy banks that just missed theirs?
I’m not arguing banks are worthless.
I’m asking what fundamental improvement justified that rotation. Because the earnings reports certainly weren’t it.
**5. AI Software vs. Semiconductors: At Le