We finally hit the wall. Ten sectors red. Momentum flipped negative. For the first time since February, we’ve entered a full-blown negative momentum environment — and that changes everything.
Key Takeaways
Negative momentum is back
- All 10 S&P sectors flashed red, marking the first broad sweep since the February selloff.
- That doesn’t mean collapse yet — it means the next few days will trade like a minefield of short-term reversions and algo squeezes.
Liquidity plumbing under pressure
- Repo and SRF usage spiked — the Fed’s quietly adding temporary cash against Treasuries just to keep pipes flowing.
- It’s not QE, but it is shadow money creation — and it’s what’s keeping this market from cracking wide open.
Michael Burry’s $1B short isn’t about Nvidia
- His bet targets the system, not the stock. The collapse in leverage and collateral confidence is what he’s really after.
- He’s betting on a liquidity shock — not an earnings miss. The setup looks eerily similar to pre-SVB stress.
Cash is your best friend
- We’re in the “cockroach” phase — where hidden balance sheet rot starts surfacing one institution at a time.
- Preserve capital, trim winners, and don’t rush to sell puts. Liquidity is life right now.
What I’m Watching
The FNGD and FAZ are my tells. If the leveraged inverse ETFs start to trend, that’s confirmation we’re breaking deeper into the negative phase. I’m tracking oversold signals on the 30-minute RSI across key tech names — AMD, Amazon, and Nvidia — for potential contrarian bounces. Defensives and energy are the only sectors with heartbeat-level strength, but even there, reversions will come fast.
Markets don’t crash on the first dip — they grind, re-test, and then collapse when confidence dies. Right now, we’re just entering that grind. Keep your powder dry and your stops tighter than your opinions.
Until next time,
Garrett Baldwin
TheoTRADE