AJB Capital

Good morning... I'm raising the Yellow Flag this morning... and I want you guys to understand why...

One of the most underappreciated risks in the market right now has nothing to do with earnings, valuations, or macro headlines. It sits inside the structure of the market itself.

Systematic strategies remain heavily long.

Trend-following CTAs, risk parity funds, and volatility control strategies collectively hold several hundred billion dollars of equity exposure. According to Bank of America, roughly $300 billion sits in CTA positioning alone, with another $400 billion split between risk parity and volatility targeting strategies. These positions are not discretionary. They respond to price, volatility, and trend signals.

Momentum has quietly deteriorated beneath the surface since October, even as headline indices remain near highs. When momentum fades while exposure stays elevated, downside becomes asymmetric. Small price moves can trigger large forced selling, not because investors chang

We're in the Green, but we are currently above the 50-day EMA on the FNGD and the FAZ.

This means that there are still concerns about leverage... we still have insurance players under pressure. Japan held interest rates at 0.75%... but there's still some tension here.

Be really cautious...

Two Names to Keep on Your Radar

If you follow AI or semis, you already know ASML. They’re the quiet monopoly sitting in the middle of the whole thing.

Most of the names people talk about, Nvidia, TSM, Intel, the hyperscalers, they all rely on ASML’s machines. There isn’t a real substitute. If you want cutting-edge chips, you go through them.

Those EUV machines are massive, complicated, and priced close to half a billion dollars each. A big fab can need eight or ten, sometimes more, so the order sizes get stupid fast. That’s why ASML has the leverage it does, especially with the U.S. leaning on them not to ship the top end gear to China.

What I like to watch next is the stuff that trades around ASML.

Photronics (PLAB) is a critical piece of the supply chain. Different business, but the tape tends to rhyme. When ASML runs, PLAB usually follows. When ASML gaps and PLAB lags, that spread often closes.

The other one is VAT Group (VACNY). They make ultra-specialized valves used in this equipment.