Silver Surfer_z

[Silver Surfer_z @silver_surfer_z]

@NextPinApp Very well written thank you 🙌🏽🙌🏽🙌🏽

[Charlie Bilello @charliebilello]

Treasury announces bigger “debt buybacks.”

Bitcoin +5%. Gold +3%. US Dollar -1%.

Markets understand what this really means:

More deficits. More debt. And a desperate attempt at financial repression.

Instead of addressing the elephant in the room - higher interest rates driven by relentless spending and surging national debt - Treasury is resorting to financial shenanigans to suppress yields.

[Patrick OShaughnessy @patrick_oshag]

Ben Thompson on why we might run out of capital before we run out of compute:

"I'm worried about the timing mismatch in terms of the actual return on investment producing enough revenue to fuel investment.

We're working our way down the capital curve. We started with free cash flow.

The speed with which the tech companies blew through the debt markets is kind of incredible. It took like a year, and now Google's issuing equity.

Nvidia's putting together this $500 billion thing to tap into pension funds and insurance floats and things like that. What's after that? Where does the money come after that?

Ideally we actually flip back to free cash flow funding this, but if there's a gap there, if we don't get there soon enough, then we could have a big blowup.

The railroads had a real duration mismatch. To build a railroad and make money off it was a decade or multiple decades long endeavor, whereas you had to issue money to pay for it in the short term.

And then they ran out of money. That's what happened in the 1870s.

We don't have enough compute because there was insufficient investment made in 2023 and 2024.

So today, when you say there's not enough compute, all the money companies are putting in today doesn't equal compute tomorrow. It all goes into compute in 2029.

I believe in AI. I think it's a real thing. I think the economic impact is going to be astronomical.

You can believe all that and be worried about, are we going to make the bridge to this actually generating the level of returns necessary to continue to fuel this going forward?"

[Silver Surfer_z @silver_surfer_z]

@thesupermanmx ☝🏽

[Superman @thesupermanmx]

Two economists mathematically proved that AI will destroy the economy.

Researchers from Wharton and Boston University published a terryfiying paper called "The AI Layoff Trap."

They mapped out the economic end-game of the AI transition, and it exposes a fatal flaw in competitive capitalism.

When a company replaces a worker with AI, it captures 100% of the wage savings.

But that displaced worker is also a consumer. When they lose their job, they stop buying things.

The company gets all the savings, but the loss of consumer demand is spread across the entire economy.

If there are 20 competitors in a market, a CEO only absorbs 1/20th of the economic damage their layoffs just created.

So every single rational CEO has a mathematical incentive to automate as fast as possible.

They can literally see the cliff approaching, and they still step on the gas.

It triggers an unavoidable Prisoner’s Dilemma. If you don't automate, your competitors will, and they will crush you on price.

It doesn't just hurt workers. It destroys the businesses, too.

The economy gets trapped in an automation arms race. Companies fire their workforce to stay competitive, until the entire consumer base is completely hollowed out.

At the limit, the paper concludes: “Firms automate their way to boundless productivity and zero demand.”

And the scariest part?

The researchers mathematically tested every popular fix.

Universal Basic Income? Fails. It raises the living standard but doesn't change the corporate incentive to cut jobs. Retraining? Fails. Worker equity? Fails.

The paper proves that more competition actually makes the collapse happen faster. And "better" AI makes the damage worse.

The only thing that mathematically stops the collapse is a targeted automation tax, forcing companies to pay for the purchasing power they destroy before they automate the job.

[Silver Surfer_z @silver_surfer_z]

@risktaker6666 Bravo! 🙌🏽🙌🏽🙌🏽🙌🏽🙌🏽

[Sam Rose @samwhoo]

This might be the most beautiful thing I've read in my life. What a privilege to be alive in 2026.

https://t.co/07BtpKswBu

[Silver Surfer_z @silver_surfer_z]

I'm a MAX Tier Retail sub. Your Mr Whale is a terrible, awful, unreliable agentic tool. I'm using the Orca model, and it is repeatedly giving incorrect/made up/stale info for live options flow/greek structure data...if you care get in touch and I'll show you some ridiculous outputs.

[Silver Surfer_z @silver_surfer_z]

👇🏽

[Khing Oei @khingoei]

Every levered portfolio manager knows the drawdown where the book’s pricing “doesn’t make sense” and will come back, and knows it does not matter. I have sat through a few. You generate liquidity or someone generates it for you. Now that the dust has settled, time for an assessment of the Situational Awareness situation. Did Citadel rug Leopold?

The theory going around: July 28, Citadel calls a surprise Fed hike. July 29, market sells off & Situational Awareness gets margin called. July 30, Citadel buys the book — and the positions rip 15-30% the moment the ink is dry.

I can see why it looks that way, but what happened is simpler. The fund ran ~4x gross leverage (per CNBC). At 4x, a ~30% drawdown in your longs is a ~120% hit to equity — after a 400%+ run into crowded AI names, no conspiracy required. On July 29, Goldman, JPMorgan & BofA issued margin calls simultaneously. And the hike call came from Citadel Securities, the market maker — a different firm than the fund that bought the book. Which, by the way, had to outbid Millennium & Jane Street in a competitive process.

In my view there’s a key part of the story no one focuses on: the way this unwound helped the whole market.

Three primes calling collateral at once is exactly the Archegos setup (remember Bill Hwang’s highly concentrated and levered $36B family office that imploded in 2021?). After margin calls the standstill call failed & each bank raced to dump Hwang’s positions first — blocks hitting the open market for days, Viacom & Discovery halved, the slow banks ate $10B, the equity went to zero. That’s what a bank liquidation of $20B of levered AI exposure looks like: every desk front-running the known flow, correlated names cascading, margin calls spreading to the next levered fund.

Instead, the entire book moved to one strong balance sheet in a single block, pre-open, at a negotiated discount. Banks repaid in full. Leopold Aschenbrenner keeps ~$10B including Anthropic instead of zero. The names V-bounced the same session — IREN closed 30% off its low — because the overhang was gone before the market ever saw the flow. Citadel earned the discount for warehousing the risk. That’s the price of immediacy and providing liquidity, and it’s cheap compared to the alternative.

One large block at a discount beats a slow public execution, every time. So not a rug but a circuit breaker. When the market forces your hand, your thesis doesn’t set the outcome but your collateral that does. And the discount at the exit is what leverage costs on the way out.

[Silver Surfer_z @silver_surfer_z]

His “4x leverage” just eviscerated any credibility…he will have to build it back 1:1 with LPs forcing legal language to never leverage again. Then we will know his true investor chops.

[Hedgie @HedgieMarkets]

🦔Leopold Aschenbrenner's hedge fund Situational Awareness just got forced out of all its public holdings after margin calls from Bank of America, Goldman, and JPMorgan. The fund hit $45 billion at the start of July. His biggest bets were SK Hynix, Nebius, SanDisk, Micron, and CoreWeave, all down more than 35% this month. His shorts on software names like Adobe went against him too. Citadel bought the bulk of what was left. He's 25 years old.

My Take
Aschenbrenner wrote the essay series that became the intellectual blueprint for the AI infrastructure trade. Massive expansion of chips, memory, data centers, power. He was probably right about the demand. He just needed it to arrive before his margin calls did, and it didn't. When both sides of your book move against you at once, longs down and shorts up, there's no way out. His prime brokers sold for him.

He named the fund after the ability to see what's coming, and got margin-called because he didn't see the turn. $200 million into $45 billion in two years, given back in a month. Korea liquidated 75% of its leveraged positions this month. Now Wall Street funds are getting the same calls. The AI infrastructure thesis might be right over the long run, but a leveraged fund has to survive until then, and his didn't.

Hedgie🤗

[Neil Sethi NEW account @neilsethinew]

Analysts at Signum Global Advisors led by Andrew Bishop have created a "TACO index" to attempt to discern when Pres Trump might de-escalate the Iran situation.

The index is comprised of Brent crude, the 10-year yield, the number of Hormuz crossings, and the SPX.

In backtesting they found that a 2.3 to 3.4 standard deviation move — or an average of 2.9 standard deviations -- has seen action from the President in the past.

Putting that in today’s terms, the analysts find it’s not yet time to TACO — but it’s getting closer. “Extrapolating linearly would suggest that a TACO could happen as early as July 22 and ‘should’ happen no later than July 30 (unless conditions materially improve, which seems unlikely) – with history suggesting July 26 as most likely,” they said.

[Silver Surfer_z @silver_surfer_z]

@JonEtrades Yes. 7400s is a decent pullback; that node is big time gravity center

[Silver Surfer_z @silver_surfer_z]

Outlook on $ES / $SPY / $SPX

Lots of FinTwit are convinced we're basing and headed to new HHs... despite Kimi K3 from last week, $TSMC & $ASML quarterly performance show robust evidence of strength for the AI/CAPEX trade. Today's $GOOG CAPEX $ and 1st negative operating FCFs have diminished confidence, BUT not the actual performance engines.

Confidence in buyers at this level is shaky at best, weak on any ERs stumbling

ES/SPY is technically poised for some pullbacks for a lower level of basing before any move upwards.

[Silver Surfer_z @silver_surfer_z]

@volsighthq I'm not seeing the similarity at all...please explain further how this island doji currently looks anything like back in Oct 2025...??

[Silver Surfer_z @silver_surfer_z]

Why do majority ppl dismiss this as simply “distillation derivatives of the frontier labs”? Open weights are very powerful in the wild…yes they increasingly need massive compute just to run, but that will get solved…we are force fitting the narrative rather than looking at the actual data and benchmark results.

[Silver Surfer_z @silver_surfer_z]

@HyungsokAhn Well summarized and clearly explained 🙏🏽

[Silver Surfer_z @silver_surfer_z]

@MikshuAlpha He agrees with you on OPEX tomorrow ….

[Alphatica @alphaticaio]

SPX GEX LEVELS: Jul 17

We've tracked three complete build-shed cycles over the last ten sessions. Each one more aggressive than the last.

Over the last ten trading sessions, the blanket has been running through a repeating cycle: it builds for 2-3 sessions, peaks, then a single session of aggressive put buying strips 40-78% of it in one day. Then it rebuilds and the cycle repeats.

🚨🚨Here are the three cycles:

Cycle 1 (Jul 6-8). Blanket built from +$385M to +$796M over two sessions. Iran strikes hit overnight. Single session shed: -46%. Flip cushion narrowed to 36 points. Result: absorbed, rebuilt over two sessions, reached +$1.11B.

Cycle 2 (Jul 9-13). Blanket peaked at +$1.11B. Pre-CPI and earnings hedging hit. Single session shed: -64%. Flip cushion narrowed to 48 points. Result: CPI and earnings came in clean, blanket rebuilt to +$895M in two sessions.

Cycle 3 (Jul 15-16). Blanket peaked at +$895M. No obvious catalyst. Single session shed: -78%. Flip cushion narrowed to 10 points. This is where we are now.

The pattern that matters: each shed is getting deeper. 46%, then 64%, then 78%. And the cushion between spot and the flip is getting tighter at each trough. 36 points, then 48, then 10.

The first two cycles had clear catalysts, Iran strikes and CPI hedging. Today's shed didn't have one. When the blanket thins without a headline, it means the selling is coming from positioning behavior, not event hedging. Institutions are loading puts at spot because they want downside protection at this level, not because they're bracing for a specific event.

The most important change: the max accelerator moved to 7,515. That's 19 points below the close. During the stable suppression regime, the max accelerator sat at 7,000-7,300, hundreds of points away and structurally irrelevant. During the June oscillation, it moved to 7,200-7,400 near spot. Today it's at 7,515. The heaviest concentration of downside gamma is right under your feet.

The put buying at 7,500 today was -$116M in new put gamma, the heaviest single-strike put flow since the oscillation broke on June 29. The 7,450 accelerator tripled from -$31M to -$93M. The accelerator cage from 7,450 to 7,525 now carries -$320M. That infrastructure wasn't there 48 hours ago.

This is NOT the oscillation. The regime hasn't flipped negative. During the oscillation, GEX went to -$141M, -$452M, -$531M, -$618M. Today it's +$193M. The structure is positive. But it's the thinnest positive reading since the oscillation ended, and the flip is 10 points from spot — the narrowest cushion since June 26.

Trump speaks shortly. With Hormuz at "severe" and the Iran MOU strained, a presidential address is a vol event that institutions hedge ahead of. If the speech passes without an escalation, the puts that built today lose their reason and the hedging decays into OPEX. That's the same pattern as last week: CPI fear priced, CPI passed clean, blanket snapped back 61% in one session. A shed with a catalyst resolves when the catalyst passes. A shed without one is structural. Tomorrow tells us which this is.

What makes tomorrow important: OPEX. The near-dated puts at 7,500-7,525 that drove today's shed expire tomorrow. If the OPEX clears them the way it cleared the 7,400 puts on June 27, the blanket rebounds and the cycle resets with a new build phase. If the OPEX doesn't clear enough gamma and institutions reload immediately, the pattern is tightening further and the regime is at risk of flipping negative for the first time since June 29.

The magnets above are still intact. 7,550 at +$138M. 7,575 at +$106M. 7,600 at +$81M. The call positioning that supports the upside hasn't been unwound. The structure is bifurcated: a wall of puts from 7,450 to 7,525 below spot, and a wall of calls from 7,550 to 7,700 above. The tug of war is concentrated in a 100-point zone around the close.

What we're watching. The build-shed cycle is running faster. The sheds are going deeper. The cushion is getting thinner. The accelerators are moving closer to spot. None of these trends have broken the regime yet. But three cycles is a pattern, not a coincidence. If the OPEX resets the cycle, the structure gets another build phase. If it doesn't, the series enters its most fragile state since the oscillation.

Friday's expected range: 7,475 – 7,575. The flip at 7,524 is 10 points below. OPEX drains near-dated gamma. The 7,550 magnet at +$138M pulls from 16 points above. Direction depends on whether the OPEX clears the 7,500-7,525 puts or institutions reload through them.

Structural floor: 7,524 (-0.1%) near / 6,910 (-8.3%) deep.

$SPY $QQQ $IWM

[Silver Surfer_z @silver_surfer_z]

Disagree (albeit benefit of 15h later)….despite ASML and TSMC results with solid growth and guidance, the AI growth/Capex trade is under pressure from the frontier models getting pressure from tokenmaxxing and Chinese open source models. Also structurally al lot of the big runners since late March are extended and the momo trade is being harvested by the institutions before ER cycle fully underway. Tonight shows no sign of downward pressure reversing…but you are right about OPEX creating mechanical dynamics that don’t care about the words above.

-BTW been following you since Tenet days :)

[Silver Surfer_z @silver_surfer_z]

@TraderJonesy 👀

[Silver Surfer_z @silver_surfer_z]

I think we will see LLs way before any new HLs (and likely not HHs)….everything priced in and be catalysts till ERs across next 4-6 weeks…a lot of structural/technical weakness across a breadth of the bigger names…the AI thesis (data center capex and the frontier AI models) is under lots of stress rn because the growth math ain’t mathing

Im seeing big picture classic Wyckoff distribution setup…we were there in late March but then DonnyBoy shenanigans…

bond market is the truth serum here