Thanks to strong earnings reports, the major U.S. stock indices like the S&P and Nasdaq continue to perform well, while small-cap stocks are struggling due to liquidity constraints—and the crypto market is even worse. This is the current reality of a fragmented market. Right now, the U.S. Treasury's TGA account is like a mythical beast that only takes in money without spending. Just a few days ago, the TGA account held $984 billion, and now it's already hit $1 trillion. Back at the end of September, it was only $780 billion. Meanwhile, the amount of cash circulating in the market has slightly pulled back since mid-October. The liquidity crunch continues. As mentioned in the previous tweet about "What's next for the Fed" https://(((x.com)))/qinbafrank/status/1983706996068262259?s=46&t=k6rimWsEbo2D2tXolYcM-A, the recent so-called easing trades are driven purely by expectations of easing, but Powell's speech has dampened those expectations. Assets benefiting from easing trades are highly sensitive to liquidity, making them vulnerable to the ongoing liquidity squeeze. Plus, the crypto market's October 11 flash crash dealt a significant blow to market confidence. Here are a few things to watch going forward: 1) When will the U.S. government return to normal operations? Once the government is back to normal, the Treasury can start spending, and the TGA account—currently a dammed lake—can begin to release funds. 2) In early December, the Fed is set to officially stop quantitative tightening. While stopping QT doesn’t necessarily mean quantitative easing, halting the decline of the balance sheet could still help alleviate liquidity pressures. https://(((x.com)))/qinbafrank/status/1902370544567345414?s=46&t=k6rimWsEbo2D2tXolYcM-A 3) After the government resumes normal operations, economic data can be released as usual. Will October and November CPI data continue to come in below expectations like September's? The inflation trend will be the decisive factor for whether rate cuts can continue in December. The logic behind this was discussed earlier: https://(((x.com)))/qinbafrank/status/1984845623263445072?s=46&t=k6rimWsEbo2D2tXolYcM-A. Until then, only assets with strong fundamentals can maintain their strength. This post is sponsored by meme trading tool http://(xxyy.io) ｜ Fast trades, powerful features, monitor on-chain wallets with @useXXYYio