Current Situation of US Stocks:

Tech stocks have experienced a significant pullback, and the earnings reports from major companies have not supported the market. The chip sector has plummeted, and AI has become a hot potato. The Nasdaq has dropped over 3% in two days, and the SPX has also broken down. This week is packed with earnings reports; major companies are still seeing revenue growth, but their stock prices are not rising. In contrast, small and mid-cap stocks like $RDDT have performed well. BTC is also facing a daily-level pullback, leading to a waterfall effect in crypto stocks.

We are still in a regular interest rate cut cycle, and corporate earnings data continues to grow, showing no signs of recession. The market is undergoing a normal index correction, with the Nasdaq experiencing a sharp pullback of 3.6% from its peak over two days. Typically, a mid-term correction in stock indices approaches 10%, but the index pullback will not be a straight drop; there will be rebounds in between. It is not possible to directly determine whether we will enter a mid-term correction. After a significant short-term drop, the probability of a rebound is high. Following a sharp decline, tomorrow, Friday, happens to be the options expiration day, which usually leads to a put squeeze.

Next week will be quite important, as it falls within the window period before the elections. Institutional betting will be more intense, and volatility will be severe, so be prepared at any time.

In the long term, regardless of whether Harris or Trump wins, US stocks will continue to rise. However, the returns from major companies will likely be lower than those from small and mid-cap stocks over the next year. Bitcoin, as a well-prepared reservoir, remains bullish in the first half of the interest rate cut cycle.

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