What happened today?
Wednesday December 3, 2025
Macro:
The ADP Employment Change came in negative with a print o -32K compared to expected +10K. This miss plus the recent payroll downward revisions should solidify a rate cute next week. Polymarket is showing 94% which seems like free money even after exchange fees. Spend 1% to convert USD to USDT, lose 1.5% entering the position. Make 4.5% net.
Interest rate sensitive stocks rallied.
IWM 0.00%↑ and XBI 0.00%↑
Core PCE Price Index MoM, Michigan Consumer Sentiment and Personal Income MoM are all scheduled for Friday morning.
There will likely be a low bid scenario into the data window though only a real high mark for PCE matters at this point for the FOMC December Meeting.
For the FOMC meeting next week, what is important to me is the dot plot and meeting notes which won’t be released until January 8, 2026. I do not believe the existing voting members nor the members rotating in to voting roles next year are morons.
I expect them to be very split and leaning hawkish (i.e. more concerned with inflation.)
Watch for a low bid pressure moment (again) during the lead in to the speech and during the speech.
Trump’s presumptive nominee Kevin Hasset is a moron of the highest caliber. But what Trump (and most people) don’t understand is the Fed Chair gets one vote. And the other Fed committee members are more even less likely to congeal around someone who they deem likely eats Play Doh.
Burry came out and qualified he expects the AI trade to blow up this year or next as opposed to Friday. This should calm the market long enough for most market participants to forget what the phrase “circular financing” means.
Crypto:
The ongoing narrative is that his past week bitcoin sell off was due to the collapse of the “carry trade.” Well, the Japan 10Yr bond continue to sell off today spiking yields even higher reaching 1.895 and bitcoin is up 10% in the last 24 hours.
So obviously the “carry trade” was not the cause of the sell-off. Be wary of anyone pushing the “carry trade” contagion narrative.
Retail market participation (especially foreign market participation) is at all time highs reaching 25-30% of daily volume. The amount of short-term (not carried) leverage is reaching epic proportions as well.
Korean and other South East Asian traders run high conviction, high leverage and are reeking havoc on the crypto and US equity markets.
The story invention is post hoc to the overnight trade. Is the unwinding of the “carry trade” a potential problem? Yes, but it’s not very high up my list of worries.
Micro:
Capricor Therapeutics blew up shorts today.
The price never reached the channel but it was pretty close a few days ago. Even if the short thesis was correct the risk/reward was minimal.
If you need a refresher on what these chart show. See here. My version is just dark mode.
What is important to pay attention to is the float and previous trading patterns. If you read the tape this has been heavily shorted for months and sprang back every time.
Just ask yourself why a stock would go up 300% and down 50% over and over again if there was actual selling or capitulation. Elasticity is a sign of tension.
This is indicative of decreasing effective/active float and very likely the float was effectively negative before today’s news.
The same boiler room idea applies both long and short side. There are only so many shares that can be loaned out. And the people loaning the shares can always just call them off loan.
But that was yesterday’s reality.
Today, I bought PUTS in the afternoon. There are few reasons for this trade.
First, the data isn’t compelling. Shorts are usually right. CEOs are usually full of shit. But, full of shit in a beach house selling shares paid for.
Second, they need to raise capital and are sitting on an active shelf.
If the bank came to me here, I would want a warrant kicker and a deep discount. So my thinking is just that.
If they don’t raise very soon, that’s a good sign no one wanted the deal. Either way decent odds this loses buoyancy.
Third, if I am going to burn money hedging the market I might as well do it via PUTS on Capricor. If something happens to the market, say Trump tweets the FDA is shutting down or some other stupidity, Capricor will fall faster than the rest of the market.
So if this goes to zero, I don’t care.
I recently did the same dual purpose hedge against the quantum stocks as well. Sometimes you have to get created to hedge the Giant Turnip-head.
Worked out.
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As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ