This morning I came to you live from my old basement in Maryland—because why not keep it weird. The market, though? Not weird at all. Just more of the same: a liquidity-driven burn higher that refuses to quit. Momentum remains king, and if you’re trying to fight it, you’re just volunteering to be exit liquidity.
Key Takeaways
Liquidity is the fuel, not the headlines
- Weak ADP, shutdown noise, even Treasury auctions—none of it matters.
- Liquidity is flowing, and that’s what’s driving AI, China, and gold. U.S. equity funds just saw $63B in inflows, the largest since the election. That’s the real story.
AI still owns the tape
- Nvidia, AMD, RXRX—the whole AI basket is hot again.
- Traders are chasing momentum here, but the smarter play is structuring spreads with the 20-day moving average in mind instead of blindly chasing.
Rotation under the surface
- Energy, cyclicals, and financials are waking up while defensives and consumer names stay weak.
- Russell 2000 momentum looks healthier, with two-to-one breakouts versus breakdowns. That rotation is critical—it’s not money leaving, it’s money moving.
What I’m Watching
I’m watching spreads on AMD and RXRX as proxy AI trades, with an eye on pullbacks to the 20-day as entry points. Gold pushing toward $3,900 is also on the radar—liquidity proxies like that can’t be ignored. And I’m keeping a close eye on the regional banks and private credit—those problems haven’t gone away, even if liquidity masks them for now.
Markets are overvalued, sure—but that’s been the case for 17 years. As long as liquidity keeps sloshing through the system, we ride the wave. Just don’t confuse momentum with safety—it’s a fine line between trend-following and becoming exit liquidity.
Until next time,
Garrett Baldwin
TheoTRADE
