Tomas Hermensa said:

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Early predictions for Monday opening prices:
ROKU $403
SPY $403
WWR $4.03
ASAN $403

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Don't be a jerk. WWR $403 sounds nice too.

I'll take VEON $4.03

Morning!

Back to it with y'all.

Snapshot...



SPY testing the 428 level early premarket. I had 428.15 and looks to be pinging that level.
Qs at 356
VIX slightly over 20.

Should be an interesting day. For now...chillax and see how the battle plays out.



Trade wisely!

Bull pause IMO. Every level my furu's post are getting beat through. The Bears have the ball....and quite frankly Delta will be the excuse, but there is more to it here. 30yr auction was a sign, and now we get to worry about budgets, and debt ceilings, and BS like that. ATH's are done for a lil bit. This is 30K's time to shine....grab the reigns dude.

Monday Macros

Delta Variant and Stagflation ...Fears of Meltdown... Stocks Plummet Bonds Soar

Unfortunately the bond markets seems to continue to be sniffing out fear and a global slowdown, which is leading to a Flight to Quality in the Treasury market... We sent out a quick note that the equity markets opened poorly last night, but it has accelerated from about 4 am... 10 years traded as low as 1.238 (another BB service says 1.245) which is lower than July 8, pretty much at the 200 day moving average... While it is stabilizing at that level for now, it looks like equities, which are at their lows of the overnight session, will head lower.. Dow is down 350 , S+P down 31, while Nasdaq is benefiting from the lower 10 year yield and is only down 50 points....Overseas markets are down around 2%.

Question now is whether this is the start of a correction in equities, or just a quick scare where equities will come back... Our general view is that from a seasonal standpoint, equities should stay steady until around the Jackson Hole meeting... But the stagflation argument, slowing global GDP , because of the increasing fears of the variant, the Fed ignoring or just giving lip service to inflation, is causing consternation in equities globally.

Inflation... We could talk for an hour on all the inflation out there... But the reality is that after watching Powell last week, it is clear to us that he does not care about inflation... Yes he gave it more focus in the Senate testimony and gave the standard response that the Fed will be there to prevent inflation from getting away from them, but it is clear that his only focus is on the economy and employment... And what he is looking at, similar to Williams, is a fear further out, possibly mid to end of 2022, that worries him... We tend to disagree, but Powell's vote, at least until the January 2022 meeting, is paramount and worth more than the Kaplan vote... And Powell continues to be worried... We still see a strong US economy through the next year and a half, but many are worried about another global slump or slowdown... And that fear is what is permeating the markets as we start another week.

Rates and Fed... The Fed is in a black out period until their meeting next week.. Tapering will clearly be on the agenda, but with risk markets acting this poorly, it will be given lip service only, similar to inflation... More will come at the Jackson Hole meeting, but treasury markets are building in the possibility of a Fed mistake.. As much as we like to agree with JPM, that the fair value of 10 years is 1.55, that is not the next trade... Over the next few days, or the next few hours, the 200 day moving average for 10 years will be hit again.. And the third time down is usually when it gives away... We will study the charts but 1.20 and then 1.125 looks like an objective... 5 years have some resistance at .70, and long bonds 1.85, but a long bond objective of 1.75 is in the cards...

Wall Street Journal weekend edition had a front page story on Corporate Credit... They basically said that spreads are approaching long term tights, and is priced for perfection... So we can not help to point out that treasuries and corporates seem to be looking at different scenarios... If treasuries are fearing a slowdown , stagflation scenario, when will the corporate bond market wake up to this and widen out?... We do not expect that much widening for now, but if this current wave of fear accelerates, than corporate spreads (and other credit as well) will start to widen dramatically... But corporate buyers seem to feel that these moves in equities are blips and the overall economy is fine... And if the infrastructure plan gets passed slowly, it will hit the economy in early 2022, to mitigate any type of slowdown... Funny how it will hit the economy in time for the midterms...

There is plenty we can point out, but our view is to get the bad news out first... Expect problems in risk today with treasuries benefiting... We will hit more new low yields in UST today... Inflation, while real and not transitory, is on the back burner for now.

$30,000 Millionaire said:

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There is some support at 4250/4200 and a lot of support at 4150. I would expect a bounce at 4250 and certainly at 4150 because we will get oversold there. Never a bad thing to take some profits on your shorts.

I am not convinced this doesn't rally like crazy, though.

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General advice - don't short down here, you missed the move. Don't panic sell your longs, this will pass but respect your selling rules. Watch for bounce to 21. Acceptance over, go long. Rejection, go short.

Basically the only positions I'm holding right now are WWR and ELOX. Plenty of cash to continue averaging down there

IWM spread straddle worked, ha! partly beginner's luck, first straddle I've ever attempted.

CrazyRichAggie said:

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SPY $425 here we come.

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Well fellas, I'm gonna go ahead and head on down to the Pub if anyone wants to join....