9/26 Recap

We got a move down today in tech names that saw nearly all the megacaps down 2% at one point led by Amazon who had their Antitrust suit finally revealed today. I will get into that below. The VIX soared over 10% to 18.20 as of now, the DXY is over 106, Oil is almost 91 and the TNX is green at 45.50. All very bad things for the overall market.

The SPY continues to be weak and looks like its date with 420 below at the 200 day is coming in the next few sessions, it’s less than 2% away now. The RSI is almost at max oversold and a bounce should come soon, probably at that 200 day.

There isn’t much more to add here other than I’ve been pointing to weakness after that trend break and it all coincides with the move up in the 4 things pressuring equities: VIX,Oil,Treasuries, and Dollar. Any retreat in those things and equities will turn back up. We also had Kashkari from the fed say there was a 40% chance much higher rates will be needed today. I don’t know when someone is going to just admit the fed has no idea what it is doing or that trying to play God isn’t working, but for now we will give them the benefit of the doubt since we are told that they are much smarter than the rest of us.

As for Amazon, the FTC lawsuit today finally came out and the name quickly bounced up off lows and saw end of year call buying. The lawsuit is baseless, but then again everything Lina Khan does, is. That is why she has never won anything major vs any of the large companies. From her law school paper 6 years ago that laid out Amazon as her target, this case was just something she always wanted, but the allegations today about how Amazon 1P business is harming sellers is laughable considering the 3P business at Amazon, which is independent sellers, is now over twice as big as the 1P business. It’s pretty hard to prove Amazon is harming any consumer, which is the FTC goal, by forcing sellers to use Amazon’s shipping. Consumers use Amazon so much because of that logistics network. Once upon a time 20 years ago we all bought things online and sellers used to ship them to us through whoever they wanted like Fedex and UPS, those shipping speeds were all over the place, what makes the Amazon Flywheel spin is that guarantee of when your package will arrive and that is why 40% of e-commerce goes through Amazon. Consumers go to the best experience, there is plenty of competition we’re constantly told from Walmart, Costco, Target, Shopify,etc In the end Amazon keeps making incremental gains because consumers prefer the experience vs others, if the government doesn’t like it, they can setup their own logistics company and lower fees for sellers but considering how poorly run and how much money USPS is losing, that is likely not in the cards.

In a sense we’re turning into Europe here where our government just sees megacap tech as a place to target whenever they need money. Imagine for a moment they succeeded in breaking up Amazon, they won’t, but imagine they got their way. Who wins if Amazon breaks up? Consumers by getting packages at slower delivery speeds from inferior logistics networks? That’s a win? This is a shakedown and they will settle with Amazon with a fine in a few years. Europe does these constantly.

Trends

The amount of XLF call buying in the past week has caught my eye, lots of focus on financials especially as the media narrative is blowups are coming. They’re buying heavy calls out in 2025 there from the last few recaps. AMD saw alot of call buying too over the last week and that now sits on its 200 day.

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