INTERNAL MEMO

RE: The Unraveling. December 29-30, 2025

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TO: Anyone Still Holding December 2024 Conviction Trades
FROM: Market Operations
DATE: Dec 30, 2025
SUBJECT: Please Read This Before Markets Open

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WHAT HAPPENED

The Santa Claus rally got mugged. S&P down 0.35%, Nasdaq down 0.5%, Dow down 0.51% on Monday alone. Tesla tanked 3%. Nvidia dropped 1.2%. Palantir collapsed 2.4%. Oracle lost 1.3%. These are names that carried you through 2025. Now they're being treated like they're radioactive.

Gold got vaporized. Silver got annihilated—down 7% after briefly hitting all-time highs above $80, down 6% in a single session, pulling back from a year-to-date rally of 155%. The unwind happened so fast traders are still checking if their screens are broken. Spot gold fell 4.4% to $4,349. Newmont (gold miner) dropped 5.6%. This wasn't a correction. It was a conflagration.

Real gold story? It's December 30th and we're in the teeth of year-end, when liquidity evaporates, when quants unwind, when every manager who had a bad year tries to salvage December, and when technical traders smell blood the instant a stop gets hit.

THE CRYPTO WHIPLASH (Because Why Not)

Bitcoin rose above $90,000 on Sunday—briefly. Monday it was back below $88,000. Ethereum is pinned near $2,930-2,950, trapped between $2,900 support and $3,100 resistance, utterly directionless. XRP, Solana, Dogecoin—the alts—all retreated. Total crypto market cap is $3.04 trillion, up 0.8% on the day, but that's academic.

What matters: Bitcoin and Ethereum ETF outflows. Friday alone: $275.88 million in Bitcoin spot ETF net outflows, followed by six consecutive days of outflows totaling $443 million. Ethereum spot ETFs bled $59.5 million for the week. Meanwhile Solana and XRP funds pulled in $70 million and $7.5 million respectively. So the story is simple: institutions are dumping the mainstreams and getting weird with layer-1 tokens. Classic end-of-year portfolio rebalancing meeting some genuine sector rotation.

Oh, and crypto trading volumes are 30% below normal. You're watching a market move on fumes and momentum technicals, not conviction.

THE CHINA WILDCARD (Because It's Never Simple)

The offshore yuan strengthened to 6.9926 per dollar on December 30. The onshore yuan is trading near 7.0067. This isn't noise—the yuan broke through the psychologically critical 7.00 level for the first time since September 2024, and the PBOC is now gently pumping the brakes, signaling through state media that they don't want a unilateral appreciation trap.

Why does this matter? Because it suggests Beijing knows something about what's coming in 2026 and wants to control the conversation. The yuan is up 4% this year. Goldman Sachs thinks it's still 25% undervalued. Exporters have $600 billion in unsettled foreign revenue sitting offshore that could repatriate if they believe the strength holds.

The PBOC is also launching a new digital yuan framework on January 1. The e-CNY will start earning interest. Not a big deal for global markets, except it signals that China's central bank is moving past "novelty" and into "infrastructure" with its digital currency. When Beijing does that, everyone else notices.

THE REAL PROBLEM

Year-to-date, the S&P 500 is up 17.4%. Nasdaq is up 21.6%. Western Digital is up nearly 300%. Micron up 250%. Palantir up 140%. Most of the year's gains came in concentrated names in concentrated sectors. Real estate—the only sector to disappoint—is up just 0.5%. Alexandria Real Estate down nearly 50%. Iron Mountain down 21%.

This isn't broad-based bull market structure. This is concentration compression, and compression always ends the same way: liquidly and with regret.

The Fed's minutes come Tuesday at 2 p.m. Home price data at 9 a.m. Between now and then, watch the 10-year Treasury. It's at 4.11%, lower than where it was. That means someone is already pricing in more Fed accommodation than the Committee itself is saying. That spread—between what's being communicated and what's being traded—is where volatility lives.

THE CLOCK IS TICKING

Three trading days left in 2025. Markets are technically closed Thursday (New Year's Day). This means we have:

• Today (Tuesday): Fed minutes + home price data. Everything happens here.
• Wednesday: Whatever the market digests from Tuesday.
• Friday: Exit trades. Year-end window dressing by funds who need to look respectable. Passive flows. Thin bidders.

Volatility (VIX) is at 14.41, technically calm but brittle—the kind of quiet that precedes bad jokes.

BOTTOM LINE

You made real money in 2025. Congratulations. But the market just sent a message in 48 hours:

1. Concentration is reversing. Mega-cap profits are flowing to alts and smaller plays.
2. Technicals matter when liquidity is thin. Gold and silver proved that yesterday.
3. Central banks are nervous. The Fed's divisions, the PBOC's careful hand on the yuan, the ECB's silence—they're all signaling caution about what comes next.
4. You've been paid for 2025. Defend 2026.

January will clarify things. Right now we're in the eye of it—the moment between years where position sizes matter more than theses matter and where the person with the steadiest hands wins.

The Fed will tell you their thinking tomorrow. Pay attention to what they don't say about inflation risk.

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Markets reopen Dec 31. Markets closed Jan 1.

Happy New Year. Stay sharp.