For Subscriber Info visit ai.22vresearch.com or visser-labs.com Contact Mark Whaling @ mwhaling@22vresearch.com In this week’s video, I explain why I’m buying into a falling knife. The midterm “blue wave” didn’t clear the market; it accelerated hedge fund deleveraging that spread into CTAs, pods and retail leveraged ETFs. Yet equal weight S&P and the S&P ex-AI made new all-time highs the same week, PMIs sit at cycle highs, jobless claims are near record lows and forward earnings keep rising. This is forced selling, not an economic event yet. I go through the signs I am watching for an indication the selling is exhausted. The new market structure is factor and rotation shocks. Agentic trading, 0DTE options, prediction markets and retail leverage push prices above fundamentals on the way up and below them on the way down. The S&P 500 is becoming 492 bonds and 8 call options. With hedge fund panic gauges at extremes and liquidity headwinds fading, it is time to drill down deep into factor signals. Timestamps • (00:00–04:51) Buying the knife: Deleveraging hit CTAs and levered retail ETFs in a week of forced selling. I believe the midterms removed the left-tail risk of a reckless AI build-out race. • (04:51–08:11) Rotation, not recession: Equal weight S&P is up 15% year over year alongside cycle-high PMIs. The S&P ex-AI ripped to new highs while hedge funds unwound. • (08:11–10:46) Market structure: Citadel now treats factor and rotation shocks as a top risk. Agentic trading, 0DTE and prediction markets make the market far more market neutral. • (10:46–19:07) Positioning: Micron went from 200% above its 200-day to 13% below, so price and time have reset. I bought Micron most, plus Marvell and Nvidia, using the IGV software playbook. • (19:07–25:41) 492 bonds, 8 call options: Building on Marc Andreessen, most of the S&P has lost its growth. The Mag 8 are leveraging up to win AGI. • (25:41–34:18) Peak hedge fund leverage: Long/short net leverage fell 5% Thursday, the fifth largest drop since 2010. Goldman’s panic gauge hit 9.57 as levered ETFs posted record selling. • (34:18–38:36) AQR as a live tracker: AQR’s long/short, market neutral, managed futures and diversified funds had their worst 7-day stretch outside COVID. I believe this is peak leverage forever. • (38:36–47:06) Capitulation signals: The VIX jump ranked third in 25 years and put/call hit its highest since March. Thursday’s futures selling is now underwater and CDX didn’t confirm. • (47:06–54:42) Liquidity headwinds fade: Anthropic’s October numbers beat, while oil, real yields and inflation swaps rolled over. Leveraged loans ripped and European banks had their best week since June. • (54:42–1:02:16) Quality vs. beta: Beta over quality ripped Friday while the AI trade lagged. Revenue growth is 14.3% and forward earnings keep rising. • (1:02:16–1:06:12) Bitcoin and gold: Bitcoin holds the 75–76K support above its 200-day and tracks gold since March. If rates, oil and hedge fund leverage have peaked, Bitcoin and silver benefit.