11 Days of Gains? What Planet...
Global markets continue to march higher, as every last short position in the world of trading is squeezed to death in seemingly coordinated fashion. While large HF's continue to frontrun retail orderflow, they'll continue to know exactly what retail traders are doing at every moment, and how to take full advantage on the way up, and on the way down with their close proximity to the exchanges, and their HFT algos. Where are the regulators you ask? We'll have to see how much of what's really going on is even discussed in the financial media, or in congress over the next couple weeks. I imagine they'll all act like it had nothing to do with market makers, or frontrunning at all. Maybe they'll even blame the retail traders to protect Wall Street. It's amazing what politicians will do to protect their wealthy donors.
As the US majors hit new ATH's, yields continue to rise. The 10Y yield hit a new 11 month high at 1.218% today, and we're looking poised to test the 100MA (w), sitting at 1.355%, as early as this week. As the risk free rate approaches the 2% level, we'll begin to see notable pressure on equity prices according to Morgan Stanley, with the Nasdaq at risk of a 22% correction, and the S&P at risk of an 18% correction. This report was a couple months ago, so I imagine the downside has increased since then, as we're now at new ATH's. It seems like markets will never crash, but that's simply not the case. Markets will correct, and maybe even crash. When it happens I won't say I told you so, but I also won't be remotely surprised. What I'll be doing is holding a fat cheque.
The Vix is testing the post March low again, and we're looking at a sub 20's open for the first time since November, when we had that relentless short squeeze bonanza/gap parade. I recently read that long positioning in the Vix is currently in the 95th percentile, while short positioning is back to pre-march crash levels. It's no secret that HF's and the Fed themselves are short Vix. Jerome Powell himself said in 2012, that the Fed has a short position in Vix. So when we feel like we're directly fighting the Fed and market makers when we go long Vix, it's because we are. I'm still holding all of my positions, and have no intention of closing them anytime soon for those who might be wondering. If we see further weakness in the Vix, my strategy is to day trade leveraged longs with tight stops, to cushion my premiums. You guys will be the first to know how and when I begin to work my position.
It's Family Day up here in Ontario, so I'll be running some errands, and continuing the weekend festivities with my wife and cats. I'll be back tomorrow with my usual live analysis. Good luck out there today, my friends! Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
As the US majors hit new ATH's, yields continue to rise. The 10Y yield hit a new 11 month high at 1.218% today, and we're looking poised to test the 100MA (w), sitting at 1.355%, as early as this week. As the risk free rate approaches the 2% level, we'll begin to see notable pressure on equity prices according to Morgan Stanley, with the Nasdaq at risk of a 22% correction, and the S&P at risk of an 18% correction. This report was a couple months ago, so I imagine the downside has increased since then, as we're now at new ATH's. It seems like markets will never crash, but that's simply not the case. Markets will correct, and maybe even crash. When it happens I won't say I told you so, but I also won't be remotely surprised. What I'll be doing is holding a fat cheque.
The Vix is testing the post March low again, and we're looking at a sub 20's open for the first time since November, when we had that relentless short squeeze bonanza/gap parade. I recently read that long positioning in the Vix is currently in the 95th percentile, while short positioning is back to pre-march crash levels. It's no secret that HF's and the Fed themselves are short Vix. Jerome Powell himself said in 2012, that the Fed has a short position in Vix. So when we feel like we're directly fighting the Fed and market makers when we go long Vix, it's because we are. I'm still holding all of my positions, and have no intention of closing them anytime soon for those who might be wondering. If we see further weakness in the Vix, my strategy is to day trade leveraged longs with tight stops, to cushion my premiums. You guys will be the first to know how and when I begin to work my position.
It's Family Day up here in Ontario, so I'll be running some errands, and continuing the weekend festivities with my wife and cats. I'll be back tomorrow with my usual live analysis. Good luck out there today, my friends! Cheers, Michael.
*The information and analysis shared in this post is not financial advice. Always conduct your own analysis and research. I am/ we are currently holding positions in UVXY, HUV, HQD, QID.
Kommentar:
* Correction: Long US 10Y yield - not short.
