BaylorSpineGuy said:

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Did someone say my name?!?

My head is spinning. The yield curve thing is the most obvious indicator, right? And everyone is talking about it.

Gold seems to have topped (at least for time being). Commodities are coming down. Was the market bottom two-three weeks ago?

The only contrarian view that is obvious right now (yield curve inversion, notwithstanding) is that there was a giant hanging man candle on the SPY daily today ( and similar appearing candles three days running now). Suggests some steam letting out of this rally, but maybe it's just a pause before the next leg up?

Is SPX going to 5000? It certainly could, barring any bad news. Tom Lee and Fundstrat remain uber bullish. They were wrong about a V-shaped recovery in February but there also happened to be a war breaking out around that time.

The other thing…."the market always gives you a chance to get out". This bell always rings in my head.

So as I see it, this market continues to amaze. No easy money to be made like last 2 years.

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IMO, we're in the V shape recovery the past 12 days but it's way extended. I'm in 30K's camp and have decreased my risk exposure. I'm not advising puts, but I wouldn't be initiating new positions right now. The SPY is up 10+% in 12 trading days. I did buy RH afterhours when it immediately was crushed post earnings but that purchase was justifiable for what I know about RH and saw an opportunity. Other than that, I've been taking off risk and building up my cash position.

I'm not too far from buying VIX calls out 3+ weeks.

I was waiting for the FJ omen on the VIX. That long term trend really seems to favor that cup. Would like to see the trend line hold. May front run a small position a little further out.

Really hate I missed most of your active week last week but always appreciate your knowledge and selfless contribution to this board.

Yield curve inversion doesn't mean immediate market drop.

The last four times the 2/10 yield curve inverted:

S&P 500 up avg of 28.8% before peak.
Ultimate peak was 17.1 months later.
Recession started 21.0 months later.

Yes, it is a warning, but it isn't so simple.

— Ryan Detrick, CMT (@RyanDetrick) March 30, 2022

I still think chickens are going to come home to roost and I don't think we have as much time as that tweet states was the average. But I don't think it'll happen now. We still have bears to break and capitulate and end of Ukraine-Russian war elation. We still have sideline money to FOMO. Somewhere between Farmer's and Bonfire's predictions seem likely to me.

Bob Knights Liver said:

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Yield curve inversion doesn't mean immediate market drop.

The last four times the 2/10 yield curve inverted:

S&P 500 up avg of 28.8% before peak.
Ultimate peak was 17.1 months later.
Recession started 21.0 months later.

Yes, it is a warning, but it isn't so simple.

— Ryan Detrick, CMT (@RyanDetrick) March 30, 2022

I still think chickens are going to come home to roost and I don't think we have as much time as that tweet states was the average. But I don't think it'll happen now. We still have bears to break and capitulate and end of Ukraine-Russian war elation. We still have sideline money to FOMO. Somewhere between Farmer's and Bonfire's predictions seem likely to me.

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In my opinion, we have a few months of growth left. Q1 results will still be solid. Companies aren't going to guide lower growth until later this year.

I still say recession begins 3Q which means no one will know it until 4Q.

Rates Flatten Then Steepen...European Inflation Soars...Ukraine Talks Stall

It is ground hog day again.. The Ukranian/Russian talks seem to be stalling.. All the talk about a pullback from Kyiv looks more like a repositioning of troops for more attacks.. We do not trust Putin with his back against the wall... Equities are down marginally but could be much worse...overnight equities rallied in Asian time to give back all of their gains by 4 am... High to low was only 23 points... Equities should have stress going into Month end tomorrow...

Rates... Did the opposite... 10 years rallied in Asian time with some good buying...and flattened... All to be reversed when European Inflation soared... Rates have now bear steepened... Spanish CPI came in 9.8% YOY, German CPI 7.6% YOY and Austrian PPI up 18.9%... You get the gist, inflation is soaring in Europe...rates have backed up across the curve, especially in Germany... That has taken 10 years up 8 basis from 2.34 to 2.42 and now 2.40... The yield curve has reversed the inversions of 2/10 and 5/30... But for how long... THE TREASURY COUPON CURVE INVERSION IS NOT A SIGN OF RECESSION...

Month end... Our colleagues at Wells Fargo see defined corporate benefit funds reallocating 12 billion to fixed income... 5 billion coming from equities and over 6 billion from alternative investments... This will have more of an effect on the long end of the treasury market, but these are not large numbers..

The curve inversion does not indicate a recession... Since 2009 changes in 2/10 have demonstrated little ability to signal changes in growth.. Prior to all the Fed intervention ,from the GFC through the pandemic, it was more meaningful... Huge bond purchases over the last 15 years have dramatically lowered long term yields, making yield curves unduly flat... We do not think this curve indicates a recession...However, if the bill coupon curve inverted or 3 months to 10 years inverted, that would change the dynamics...

Our colleagues wrote an analysis of the jolts versus quits ratio late yesterday... They point out that the jolts opening remains the same, which has pushed up the job openings versus unemployed seeker to 1.8... And the quits ration edged up to 2.9%... These are numbers Powell is focusing on... So expect the Fed to move to rapid rate rises over the near term... We now lean to 50 for May...

Corporates..spreads remain well bid, but we think that is about to change... According to BofA, book yields on US IG corporate bonds bought in 2020 and 2021 will soon drop below FX hedging costs for foreign investors..that means potential selling of corporates for overseas accounts... Add the current BB story "(BN) Corporate Bonds Lost $1 Trillion and There's More Trouble Ahead", which we will send around... we see problems on the horizon in the second half of the year... Yesterday 4 issuers came to market to price 5.1 billion... New issue concessions dropped to an impressive .5 basis... So the market still remains well bid...but watch out for the change in foreign flows..

Expect more of the same today... More improbable headlines from Ukraine... Fade Russia for now... Some reallocation...range trade... The high yields should be in for the week with 5 years 2.67 and 10 years 2.55... But Friday starts a new month, so expect the recent high yields get taken out as the bond vigilantes come back after month end maneuvers....

Jet Black said:

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I've asked this before, but UVXY is currently trading at $12.30ish. If it drops to the $10-$11 range, would buying and waiting for someone to do something stupid be a good move?

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I've followed and traded UVXY some but I am not expert so hopefully if I am wrong here some of the more experienced guys will jump in.

UVXY will always have some downward pressure on it to trail to zero.
Much like options do as they get closer to expiration but more gradual.
Expect to see a reverse split in the coming months as it gets down this low.

I could be very wrong on this next part.
From my observations the more intense the volatility the more UVXY rises.
On a gradual rise in VIX over a long period it will rise at about the same rate or sometimes less.
If there is a sharp spike in volatility it rises at a much higher rate than VIX.
If volatility happens after hours it will still rise some but not at the same rate it would during active trading hours.



So my general advice on UVXY is timing is everything and it is great if you can get in early on those panic selling days. We never know what the next catalyst will be, but I am keeping up with the Ukraine/Russia war and if I see a major escalation trigger I'll buy back in then.

EDIT
after hours example right now
VIX up 3.39%
UVXY up 2.43%

One other note - the reverse holds true as well.
The faster VIX falls, UVXY will fall at an even faster rate.

☀️ GM ☀️ pic.twitter.com/0Y2QTXXDUV

— John Trades MBA (@JPATrades) March 30, 2022

50K: selling AAPL call at 2.5

Here comes WWR! Biden announced he's gonna use post-war power to develop battery metals! Let's ride.

Green candles through heavens floorboards.

BaylorSpineGuy said:

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Here comes WWR! Biden announced he's gonna use post-war power to develop battery metals! Let's ride.

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Wake me when Psaki says "West water to $12."

Turned on the radio and it was set on one of the kids' CDs. So right now I'm listening to "I got that joy, joy, joy down in my heart" while watching WWR.