Trading Desk - October 15th 2026
Patrick points to potential strains in AI financing, crowded Nasdaq positioning, and signs of rotation toward defensive assets, while cautioning that one day does not establish a trend. He also notes diverging oil prices and sharp shifts in Treasury futures positioning, and lays out conditional scenarios for the dollar and gold tied to market rates and growth expectations.
Preview · 5 more points in the app
Read the Full SummaryKey Takeaways
Patrick links AI-stock weakness to both financing risk and concentrated positioning: he says AI growth has relied on substantial credit, with CoreWeave's bond yields at 15% and shares down close to 16%, while Nasdaq positioning was at the 100th percentile. He says money may have started rotating away from Nasdaq leaders toward defensive sectors, but cautions that the shift is not yet a confirmed trend.
Patrick points to widening junk-bond spreads and a possible double bottom in the December 2027 SOFR contract as signs of a potential risk-off shift, while saying Treasury bonds may be defensive. He also reports sharply divergent Treasury futures positioning—a swing toward shorts in five-year contracts and net buying in the long bond—but says aggregate data cannot establish whether this was a steepener unwind; a bond rally and lower yields would make the conditions more favorable for gold only if growth expectations are curtailed and the market prices in an easier Fed in 2027.
MARKETS
“And the story turned to CoreWeave, where shares were down close to 16 % while the outstanding bond its shares were down close to 16%, while the outstanding bond yields…”—
“And what yesterday really was potentially the first kind of sign that that situation is developing so what we really saw was a substantial decline in many of the Nasdaq…”—
“And this was most evident in the commitment of trader reports where we saw the positioning score on the Nasdaq in the hundredth percentile, while the Russell's small caps were…”—
FORECASTS
“The dollar index could easily absorb a pullback down towards... 101. But so long as dips are being bought, I would still consider it technically in a clean bull trend.”—
AI Credit And Nasdaq Rotation
Patrick says CoreWeave’s credit stress raises questions about AI financing, while crowded Nasdaq positioning and a move into defensive sectors may signal rotation, though one day does not establish a trend.
Treasury Rally And Risk-Off Signals
Patrick highlights a sharp Treasury yield reversal, changing SOFR expectations, and widening junk spreads as evidence of a possible risk-off shift, while cautioning that confirmation is still needed.
Dollar, Oil, And Diverging Prices
Patrick sees the dollar remaining in a bull trend unless intermarket signals worsen, and notes that Brent strength contrasts with WTI consolidation amid flattening backwardation and extreme crude shorts.
Gold Awaits Confirmation
Patrick says lower yields and weaker growth expectations could eventually support gold through easier Fed policy, but price action has not yet confirmed a bottom or trend reversal.
Treasury Futures Positioning
Patrick describes a sharp shift toward short five-year Treasury futures and long-bond buying, but says aggregate positioning cannot determine whether traders are unwinding steepeners or adding flatteners.
Related Episodes
Important Disclaimers
Not Investment Advice: For education only — not financial, tax or legal advice.
AI-Generated: Made by AI from source transcripts and may contain errors.
No Guarantees: Past performance does not predict future results; investing carries risk.
Our Commentary · Request Removal