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      Mighty KWEB

      China tech continues moving higher post that great break out we outlined early last week. Chart 2 shows BABA, a play we pointed out in late August (here). The stock broke above huge resistance levels and momentum is huge. Our general take on China tech (BABA included) is to not forget to roll those call spreads into higher strikes as we move higher.

      Mighty KWEB
      Source: LSEG Workspace
      Mighty KWEB
      Source: LSEG Workspace
      GS on Biden: do not fear the tax hike that much....

      "The dominant market issue in our view so far has been Vice President Biden’s proposal to reverse half of President Trump’s cut in the corporate income tax rate from 35% to 21%, which we think could become a strong possibility in the event of a Democratic “sweep”. Given that such a reversal would translate directly into a hit to after-tax earnings, the implication is that it would flow through to a notable hit to US equity market valuations. Even here, the picture may be more complicated, however. There is a good chance that any shift would be fiscally neutral and could also be phased, so the full market impact would depend on what other measures accompanied it (some, like capital gains tax increases, might add to pressures of course). And given the high level of uncertainty about the broader economic outlook, these shifts may be harder to isolate than in a less volatile market. We think more attention should be focused on the international implications, where a Democratic presidency is likely to move away from the aggressive use of trade policy in the current administration and adopt a more favorable view of international institutions and alliances. Given the bid that the trade war has lent to the Dollar, we think such a move could reinforce the shift towards USD weakness, potentially ultimately also against North Asian currencies. That said, ahead of November, a tough tone on China from the Administration, and perhaps also from the Biden campaign, seems more likely than not, so we would remain cautious around currencies in the region over the near-term. Given lower implied volatility, we think these FX implications of the upcoming elections may be a fruitful area to explore"

      Goldman
      You are here

      VIX seasonality is about to kick in right now...

      You are here
      Source: Equity Clock
      VIX speculators mania

      Slightly simplified way of looking at things as there are many offsetting positions in the volatility world, but still worth taking a look at the great VIX spec short.

      VIX speculators mania
      Source: LSEG Workspace
      The VIX shorty

      Dealers running big VIX call shorts..."VIX total Vega to buy in a +10 shock now at 91% btwn ETNs and Dealer options positioning".

      The VIX shorty
      Source: Nomura
      AI mania - seriously overbought

      AIQ at the most overbought levels since July 2024...just before markets crashed.

      AI mania - seriously overbought
      Source: LSEG Workspace