Tony Greer: short semis, long gold and bonds as AI trade cracks into year-end

Semiconductors lead a violent two-day reversal

Tony Greer joined the hosts as markets whipsawed following the midterm results, with the Nasdaq sharply lower. Greer said he had been positioned short semiconductors ahead of the move and described the selloff as "not really headline specific driven," more a release of pressure after the midterms confirmed an expected outcome.

He noted extreme sector dispersion across the two sessions: on the rally day, 14 S&P sectors posted two-sigma gains or more, with five sectors including retail, financials, consumer discretionary, airlines and homebuilders posting three-sigma rallies, "and all of that completely reversed today." Greer read this as a sign of leveraged positioning unwinding rather than a clean market signal.

The AI/semi bubble is seen as bursting

Greer argued the semiconductor chart has "come undone" and that the SMH, trading near 455 down from the 600s, has "room to 350 before there's support." He linked the move to a broader repricing of the AI capex trade, pointing to Anthropic's expected IPO as a looming catalyst that could pressure the Nasdaq further.

"I think in the end we're going to learn though that natural resources and commodities are going to live through this and tech is just going to have to repric because it got so far over its skis." — Tony Greer

He also pointed to signs of stress beneath the surface, citing a report that a roughly $500 million portfolio of data center loans came up for sale in a rare auction, and criticized Wall Street sell-side calls such as a Goldman Sachs buy initiation on CoreWeave and a $500 price target from JP Morgan, which he said were designed to keep capital flowing into AI-linked IPOs.

Bonds: a low that is seen as in place

Greer said he is operating from the view that the bond market low is in from October, citing max bearish sentiment, an Economist magazine cover, and RSI readings around 8 on the long bond at the time. He said a sustained rally in oil above $110 would likely be needed for yields to retest that low, and that he wants to buy dips in bonds.

He drew a parallel to Q4 2018, when a new Fed chair hiked into a weakening economy before reversing course, and said the current setup "feels like a really good analog." He flagged that rates markets are still pricing in hikes even as a two-year yield sits above Fed funds, which Greer called a mismatch given growth is slowing.

Gold is framed as resilient through the turmoil

Greer said gold is "doing exactly what the [expletive] it's supposed to be doing" by holding above 4,100 while risk assets fall apart, after filling breakout gaps down toward the 3,950-3,800 area. He called that kind of low "the kind of dip that bottoms are often made of" if there is no follow-through selling.

He said gold is his favorite trade into year-end, arguing it can front-run a Fed decision on hikes and benefit if Democratic control revives the "debasement trade." He separately said crypto "looks fine" to him despite what he called a $6 billion hack hurting credibility, noting his bitcoin breakout position is still intact though sized small because he remains "a little bit scared of Bitcoin."

Oil, the dollar and the Fed's next move remain contested

The host noted that around 80% odds of a December hike are still priced in, which he and Greer both found hard to justify given the AI capex slowdown and emerging growth scare. Greer said he doubts the Fed can hike again given the broken semiconductor chart, though he avoided a firm call on timing.

On oil, Greer said he would consider going long into the weekend around the 200-day moving average, betting against what he views as another unreliable Iran peace negotiation, risking about $2. On FX, Felix noted the dollar looks bullish on DXY while USD/JPY struggles at a 200-day retest, which he read as consistent with a safety-oriented macro backdrop of bid bonds and a bottoming gold market, though neither speaker had a strong conviction trade there.

Homebuilders flagged as an overlooked trade

Felix highlighted homebuilders as a sector to watch, noting that despite high mortgage rates and elevated diesel costs, the group is roughly unchanged on the year. He called the flat performance "crazy" given the headwinds, and said the sector has responded positively as the bond market has shown signs of bottoming.

Greer agreed it could be a trade that avoids the semiconductor collapse while living through continued volatility in energy. On execution, Greer described using a three-pronged entry approach—a bid below the market, a stop-in order above, and a timed partial entry by week's end if neither level is hit—to build positions gradually in a security he has already identified as attractive rather than one he is still evaluating.

Open questions and disagreements

The speakers repeatedly stressed how little conviction they have about the next 24 hours given the scale of intraday reversals. Greer said he would carry minimal risk overnight, having been "buried" trying to go long semis earlier that day. Neither speaker offered a specific price target for gold, bonds, or the Nasdaq, and both acknowledged that whatever view they expressed could be invalidated quickly.

"Whatever we say today, by the time it airs tomorrow is probably going to be wrong." — the host

They also left open whether the current equity stress stays contained to leveraged pod shops and long-short equity funds, noting the bond market has barely moved since the election, or whether it broadens into other asset classes.