Sovereign funds are withdrawing from US Treasury bonds, while retail investors and institutions are betting in completely opposite directions There are several signals in today's summary that have not been fully elaborated, please add them here. The pressure on US bonds comes from multiple directions simultaneously. It was mentioned earlier that Türkiye reduced its US debt position by 88% in a single month. But this is just one of them. According to official data from the US Treasury Department, China's holdings of US Treasury bonds have fallen to $652 billion, a record low since 2008. Japan is the largest foreign investor in the world in holding US Treasury bonds, and has also been continuously reducing its holdings during this period. The driving logic behind the actions of three major foreign buyers in the same direction is the same: geopolitical conflicts drive up energy costs, non US currencies face depreciation pressure, and governments need to sell US bonds to maintain exchange rate stability. This is a rigid demand at the balance sheet level, not an emotional fluctuation. The supply side continues to increase, while the demand side continues to decline, making it difficult for the long-term yield to naturally fall. In addition, Brent crude oil is expected to continue operating in the $80-90 range in the fourth quarter, nearly 30% higher than before the conflict, leaving limited room for the Federal Reserve to cut interest rates due to inflation stickiness. In this context, long-term bond products such as TLT are difficult to generate positive returns and are not a direction worth focusing on at present. At the end of the month, there is a statistical probability of 68% of the market experiencing a pullback. Here is a quantifiable signal worth paying attention to. The S&P 500 and Nasdaq 100 have currently peaked outside the upper edge of the monthly expected volatility range of the options chain. According to the principle of Gaussian distribution, there is a 68% probability that the market must return to within the interval at monthly settlement, and only a 16% or even lower probability that it can remain outside the interval. The US dollar index has both bottomed out at the weekly level and started to rebound upwards. Historically, the weekly rebound of the US dollar has had a significant draining effect on stock market liquidity. The trading logic on Friday became relatively clear as a result: The upper limit of SPY is 749.70, and the lower limit is 735.74. The key neck line is $737. If you hold it, you will continue to approach the monthly top magnet of 749.70. If you fall below it, you will technically form a micro head shoulder top structure, and the kinetic energy will collapse step by step, directly testing 735.74. The upper limit of QQ is 723.51, and the lower limit is 705.51. At present, there has been a triple divergence of technical indicators on the daily and 2-hour charts, with secondary local highs brewing above. The key is to break through 723.51 in terms of volume, if not, then test 705.51. The 30 minute RSI of VIX has formed a low point rise divergence. Once the momentum breaks upwards, it will resonate with the US dollar index and amplify market volatility. Overall recommendation: Tighten stop loss, control positions, and avoid adding long leverage in monthly intervals. Before and after Memorial Day: Friday is likely to be good, but next week is full of variables. This long weekend requires special attention to geopolitical risks. The Trump administration has issued an ultimatum to Iran, with the deadline set to expire between Friday and Saturday. This time point coincides with the three-day Memorial Day holiday, and if negotiations break down, the United States may restart military operations during the holiday. Once the conflict escalates, the technical form that crude oil will face at the opening on Monday is that the price has converged to the final tip of the triangle since the outbreak of war, and will break through within 3-4 days because this wedge has converged to its extreme. Either break up or down, and if you break down, the market will still rise. If you go up, be careful. This pattern is statistically consistent, and once the breakthrough direction is upward, $119-120 is just the first stop. So the overall market is likely to perform well on Friday, and may even touch 7510. But when it opens next Monday, the pricing of geopolitical risks will re-enter the market. The S&P 7500 is the most important dividing line for next week. If there is dynamic resistance here, a lower high at the daily level will be established, and the combination of geopolitical shocks and technical breakthroughs will result in concentrated downward pressure. If there is no substantial military action over the weekend, bulls may take advantage of inertia to fill the gap or even break new highs. However, quantitative indicators have already shown a top deviation at the daily, weekly, and monthly levels. Even if a new high appears, it is only a liquidity trap, and the subsequent pullback will be deeper. The period before and after the long holiday is not a time window for adding leverage. Quantum computing national team entry: IBM's valuation logic is different from the other two cases. Every time the government directly invests in a certain type of asset, the market reflexively searches for historical precedents. The results of the two cases compared this time are completely different. After receiving a 15% stake from the Ministry of Defense in July 2025, MP Materials' stock price surged by 50% in a single day and was subsequently pushed to $100. But the company's own profitability was simply unable to support that valuation level, and ultimately the price halved from its peak. Intel's situation is slightly more complicated. Last August, it received a capital injection of 8.9 billion yuan and later signed a contract with Nvidia for 5 billion yuan, and the stock price did indeed experience a major upward trend. But the current position of $118 has already consumed the expected future profits ahead of schedule, and the cost-effectiveness of continuing to pursue higher prices is very low. The fundamental difference between IBM and these two cases is the starting point. According to the profit forecast for 2026, the reasonable pricing range is around $250, and the median valuation for 2027 is around $270, indicating a steady single digit growth rhythm. This capital injection is a bonus for it, not a narrative to fill the valuation gap. Technically, only a breakthrough of daily EMA 200 260 is considered a reversal. The $260-270 algorithm program will automatically trigger a sell order here. The range of $270-290 is a greater pressure zone, but the trading volume has been shrinking during the early decline, indicating that the real selling pressure above is not heavy. In the same market, two types of funds are betting in completely opposite directions. The first quarter 13F data compiled by Goldman Sachs quantifies this divergence very clearly. The average allocation of semiconductor hardware by mutual funds increased by 49 basis points this quarter, with a month on month growth rate of 25 basis points. At the same time, except for Microsoft, the low-end range of the entire software sector has expanded to -36 basis points, which is a degree of skewness that has never been seen in the past 14 years. The funding source of these funds is 94-95% from the retirement savings of ordinary households, who participate in the market through passive accounts, and what they buy depends on which sector has recently risen the most. The changes in hedge fund holdings are a completely different picture. Since mid April, the net long position of semiconductors has continued to decline. The software net long position has been slowly but consistently moving upwards since the end of April. This method of building a position will not cause price fluctuations, nor will it appear in the news. It is simply buying chips at a low level bit by bit. The directions of the two types of funds are opposite. Retail investors are buying more and more at the historical high of semiconductors, while institutions are quietly increasing their positions in the historically low-end area of software. This structural divergence did not only emerge today, but today's data makes it most clear. Hedge funds build positions at the bottom of software, with Microsoft being the most heavily weighted direction. The current price is in a sideways consolidation phase. If the bull flag breaks through the daily EMA 200 437 after it comes out, we will see a range of $470-480 above, corresponding to about 15% space. There is no need to rush in terms of pace, wait for the momentum of hedge funds to accumulate enough to stimulate the catalyst, and retail investors will also follow suit. Let the floating profit of the chip storage space run first, and be patient with the software. The two directions are not mutually exclusive, the rhythm is just different. Soft and hard are compatible. Summary: Both directions are possible, with only one key variable - oil price (Figure 1). If oil prices break below: The situation in the Middle East has substantially eased, inflationary pressures have eased, and the market has returned to the Risk On mode. There is still room for bulls to charge towards 7500-7700, and the latest time window is around SpaceX's launch on June 12th. But there is a logic to note here: the higher the price rises, the greater the deviation from the top. Quantitative indicators have deviated at the daily, weekly, and monthly levels. If the index continues to be pushed higher by a few heavyweight stocks, the subsequent pullback will be even deeper. The final adjustment target remains at 7000-7100. If oil prices break through upwards: The situation in the Middle East has not been substantially resolved, energy inflation has rebounded twice, and the pressure on the bond market has reignited. In this case, the callback will come earlier, and the targets are 7380, 7300, and 7250 in sequence. These positions correspond to different levels of support structures, and observe step by step whether they can stabilize. The commonality between the two scenarios is that regardless of the direction, June is not a time window for one-sided pursuit. Before SpaceX went public, its main motivation was to maintain stability, but going public was the biggest liquidity watershed. The current operational logic is simple: let the existing positions continue to generate floating profits, without adding leverage at high levels, and determine the next step based on the direction of oil prices.