austinAG90 said:

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Bonfire1996 said:

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By raising rates very fast, the FED is signaling that they intend to not just slow the economy, but stop it. They intend to destroy jobs.

The market is priced around 15x future earnings which implies a growth mindset. When the FED says they intend to impede that natural growth from happening, the market must be re-priced.

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Good read….Nice to someone has been paying attention…..

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Please pay attention people, when these two align its not something to brush off. Real things are happening on a broader market that people need to account for. I don't know Jack squat and i I mean that but with out a doubt I pay attention when people way smarter than me post here with significant insight

BaylorSpineGuy said:

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Thanks for your input. I agree with your assessment. My question is this: if inflation is such a bad problem (and of course it is!), why are they waiting to raise rates again next month?

Why not do it also in April? If they do raise in April and it's unannounced, the markets will be certainly rattled, but this problem won't solve itself and inflation is gonna look much worse next month when food and gas adjustments are priced in due to Russia and international things…

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now you sound like FED Bullard or private guys El Arian or Gundlach! My opinion is that all these FED fu[ks are as much political hacks as they are financial savants, and doing what you suggest is not allowed in their political DNA. There have been a few articles come out that begin to broach the FEDs true intention, to engineer a "soft landing" for the economy. I hate that phrase.

By taking a measured pace they can, hopefully, gradually attack inflation and watch data in near real time. Also, an incredibly quick rise could crash the bond market as everyone dumps varying maturities and jumps into short term, guaranteed yields.

The FED is in an increasingly impossible situation, which will get tougher by the year as Washington only knows one tactic now, print and spend. The public and media expect that to continue, they expect rates to be low, they expect inflation to be tame, and they expect the FED to figure out the formula.

Effectively, the media and public are telling the FED: "Hey, we are going to add 30 trillion +2 trillion + 2 trillion + 2 trillion. Your job is to show how that equals and remains 30 trillion."

The very smart capitalists right now are taking your stance and blaming the FED for sitting on their hands. That blame isn't going away. Wait till the media and general public blame the fed for the future economic slowdown, cause they sure as shlt aren't blaming democrats. I can't imagine being a fed Governor right now.

BaylorSpineGuy said:

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You said a few days back. Cash, though not popular now, will have 3-4% more value in the near future. I believe that's correct. When everyone is broke, cash is king.

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Put me in this category as well. I've never bought into that whole theory of "sitting on cash is losing money". When the S&P was ripping 20+% in 2020 and 2021, sure. But in tough times, when you have it and most others don't, it puts you in a great position and gives you a lot of flexibility.

My trading plan today: wait. We've had aggressive red futures with volume and seen aggressive red in DAX and STOXX50. Downside may be the play, but going short right now feels like chasing. I may sell enough VIX calls to go net free before the Fed speaks.

TSLA may be looking to fill the gap on the hourly chart down to 1010-ish. I'll wait for 8:45 to confirm before getting in, though since a reversal could bear trap TSLA puts very quickly. If I do play it short, I will target being out by 9:30. I don't want to be in during Fed comments.

Bond Vigilantes Slay Treasuries Again...Fear From Brainard on B/S Steepens Curve

We warned that markets would get dicey as we go into the FOMC minutes today at 2 PM... And we have been right... No one knows what the Fed Unwind is worth in basis points... We have heard 50 basis per trillion to 100 basis per trillion... We think it will be tough to quantify... Since the lows of Monday, the 10 year has backed up over 30 basis while the 2 year is back only 15... Our near term supports have been broken... 2.51 on 2 years, 2.68 on 5 years, 2.61 on 10 years and 2.64 on long bonds... The question we have, and we said as much in Barron's yesterday, is this a classic where the markets have front run the minutes and may reverse after the announcement at 2 PM??....

Brainard was the last of the Doves to reverse to Hawkish... And she did so with strong words yesterday.... Inflation is paramount... And B/S reduction will start in May and be significant... Again, the street has trouble quantifying this... Equities have backed up and corporate spreads are wider...Dudley said the Fed needs to get equities lower to be successful... We are not touching that comment... But risk off will be evident if rates have another leg up... George repeated her comment that rates are 150 basis through where they would have been had not the Fed done QE...does that mean that 10 years are going to 4%?

Rates 10/30 got to 1 basis point this morning, now a little over 2... 2/10 has steepened out from inversion to 8..5/30 remain negative ...if the previous support do not come into play again, then the next levels are 2.75 2 years...2.98 5 years... 2.80 10 years and 2.78 long bonds... We doubt we see a 3 handle 10 years, but not unlikely for the 5 year...

New issue corporates are looking a bit worrisome... 5 borrowers priced 6.55 billion yesterday.. Books were only 1.8 times oversubscribed... And issuers had to pay 14 basis in concessions... Clearly it is getting tougher to get it done... Maybe that is the reason we have not seen the mega benchmark Oracle deal that has been talked about...

Today it is about the Fed and Balance Sheet reduction... And how much fear that has put into the markets... Traders remain massively short the short end... But flatteners have left those trades at the whim of higher rates and a steeper curve...expect more pain...

Really wish I had kept puts overnight

great work on the vix calls! I did grab some puts yesterday at least, still holding (part luck, part remembering Mancini saying moves like yesterday typically continue into the next day, plus we weren't at a strong support yet.

found this interesting as well:

Note: Today is FOMC minutes day at 2pm and that will likely be a catalyst (probably for a reversal if we're red into it). Regardless bulls need reclaim the 200dma at ~4490 now, ideally 4500 to re-activate upside . This would trigger a classic fake breakdown setup and major rally

— Adam Mancini (@AdamMancini4) April 6, 2022

Don't pat me on the butt too hard, I did sell my 20 SQQQ calls throughout the day yesterday at points where I thought a reversal might happen.

The sad thing about all of this is the government elite that created this **** storm know what will be said when and can position themselves to profit from these swings up and down. They are free to take money from the people they are supposedly serving. That should be criminal.

if i had to gamble, i'm going with today is a fake breakdown

FJ43 said:

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Evening gents!

For the options degenerates. First, as most know, I love trading options. Also most know I don't play with major portions of any account I have and none are intended for get rich quick schemes. Fun yes. Sometimes home runs yes. But they are just part of trading I enjoy as part of active trading.

With that being said, I pay attention to those that actively and what I would say successfully trade options. One thing I see consistently is most begin scaling out once 25% or so is reached. If you haven't tried this approach maybe give it a try. I scale out, set trailing stops, etc, etc, etc all the time. More often than not it helps provide consistency on generating profits.

Above all else get out of the trade if the setup fails your predetermined levels and risk.

Anyway just a tidbit tip y'all might give a try.

Until next time…..trade wisely.

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Nice post, FJ. Whether day trading shares or options, swing trading, or longer term investing we should all be cognizant of protecting our capital. I lost 5.8% of my trading account yesterday, so about half of my gains from Monday. I kept thinking we'd get at least a little bounce to sell back at a loss, but it didn't happen. Had I been quicker to cut with the plan to re-enter after it confirms a reversal, I could have saved myself some pain. Maybe 4/5/22 was a good learning/reminder day.

sts7049 said:

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if i had to gamble, i'm going with today is a fake breakdown

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Saltyag15 said:

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BaylorSpineGuy said:

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You said a few days back. Cash, though not popular now, will have 3-4% more value in the near future. I believe that's correct. When everyone is broke, cash is king.

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Put me in this category as well. I've never bought into that whole theory of "sitting on cash is losing money". When the S&P was ripping 20+% in 2020 and 2021, sure. But in tough times, when you have it and most others don't, it puts you in a great position and gives you a lot of flexibility.

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If case you guys haven't heard, the initial interest rate on new Series I savings bonds is 7.12 percent. Great place to park cash if you don't need it for more than a year.

Last spam post - several of my SAVA call spreads filled yesterday during the great unraveling. I'll continue to keep the GTC orders active. I'm targeting 1/2024 call spreads at strikes between $70 and $155 where I can get 100:1 return. For instance if I buy $120 and sell $125 for a net cost of $0.05, or if I buy $115 and sell $125 for a net cost of $0.10.

This has slowly replaced the need to hold shares or single-leg calls for me to still profit when good news does come out. These take forever to fill and I have to look for spread intervals that might fill this cheap and have at least some volume, so this is a slow process. It may not ever pay anything if Simufalim doesn't get approved or if these jokers dilute the stock enough before then that we don't get back to >$120, but at 100:1 I like the potential.

So apparently the worst case scenario was not completely priced in yesterday...

ok maybe i was wrong

I bought XSP 444Ps. Commence market bounce.