Wednesday's FOMC meeting may be the last catalyst until late July. If there is going to be volatility, this is when we should expect it. How are people feeling ahead of this important event?
Everyone has an opinion so here is mine. I am extremely negative on the market for the next 4-6 weeks. Options markets have the lowest implieds in the last couple of years on event risk days of CPI and the Fed. June expiration gamma may be the reason keeping prices pinned. In the background is major capitulation across the street from their strategists into the bull camp. Meanwhile, like the P/C, there are many shorter term warning signs. One suspects in a de-risking scenario, that tech and quality gets smashed and that deeper cyclicals like banks and energy hold up. The other thing that I am watching out for is a downward cycle in bond yields which fits a long held pattern of mid-year reversals. Obviously that needs help on the inflation and economic data front to materialize.
Do you think there is a particular catalyst? I wonder if the central bank hawkishness idea is simply baked in the cake. The liquidity drain from the TGA also seems to be getting downplayed as just another thing that the Chicken Little's of the world like me are looking out for. I am trying to see where the Rumsfeldian unknown unknown comes from but am at a loss for the moment
Just wanted to know that do we have any ETFs tracking the index which removes the tech bias (sector-neutralized measure of growth and value as you mentioned)?
PS: Until shit hits the fan (spreads blow up significantly), LQD and TLT pretty much move together.
Everyone has an opinion so here is mine. I am extremely negative on the market for the next 4-6 weeks. Options markets have the lowest implieds in the last couple of years on event risk days of CPI and the Fed. June expiration gamma may be the reason keeping prices pinned. In the background is major capitulation across the street from their strategists into the bull camp. Meanwhile, like the P/C, there are many shorter term warning signs. One suspects in a de-risking scenario, that tech and quality gets smashed and that deeper cyclicals like banks and energy hold up. The other thing that I am watching out for is a downward cycle in bond yields which fits a long held pattern of mid-year reversals. Obviously that needs help on the inflation and economic data front to materialize.
Do you think there is a particular catalyst? I wonder if the central bank hawkishness idea is simply baked in the cake. The liquidity drain from the TGA also seems to be getting downplayed as just another thing that the Chicken Little's of the world like me are looking out for. I am trying to see where the Rumsfeldian unknown unknown comes from but am at a loss for the moment
Patience grasshopper
Great write up as always!
Just wanted to know that do we have any ETFs tracking the index which removes the tech bias (sector-neutralized measure of growth and value as you mentioned)?
PS: Until shit hits the fan (spreads blow up significantly), LQD and TLT pretty much move together.