The US stock market is gonna go pop

[clubsport]

Each to their own on the Vix level?...
The 52 week range is qpprox 13-33,,, I was pointed out that net sellers of the Vix bringing it down to the current 14 level does not imply the expectation of much volatility in the short term. This is not an opinion I have formed, this is information directly from the screens!

[Mr Whippy]

Isn’t VIX the result of other inputs?

I’m not sure how any VIX position could force entire markets to be or not be volatile?


In any case the elephant in the room is deafening.

Higher for longer rates isn’t good for anyone except those carrying debt and having a near guaranteed income… ie, governments, entrenched and protected businesses etc.


I just wonder how long the long end of the debt curve can remain subdued with the higher for longer coalescing into a firm and accepted reality.

With governments happy to keep doing mega fiscal stimulus to keep the wheels on the bus, and inflation staying high, who’ll be willing to keep buying debt?
Even 5% is stood still vs inflation, and if you know 6, or 7% are coming along…


Exciting to watch it all play out.



I’m also excited to see how MS, Nvidia etc, all make the $$$ trillions required in the coming years to justify their prices today.
Recall how much Facebook was worth with their metaverse/VR, like the whole world would watch adverts via Facebook only…
Then it corrected, reality set in.
Like Tesla were valued as if they’d be the only manufacturer of cars, then reality set in.

[gotoPzero]

clubsport said:

Each to their own on the Vix level?...
The 52 week range is qpprox 13-33,,, I was pointed out that net sellers of the Vix bringing it down to the current 14 level does not imply the expectation of much volatility in the short term. This is not an opinion I have formed, this is information directly from the screens!

I was talking about the lows, some traders (like myself) have some alerts on vix and mine is 12.00. If it drops below that I am mindful we might be entering a period where volatility might spike. But thats just for me - thats what I meant each to their own..

[gotoPzero]

Mr Whippy said:

Exciting to watch it all play out.

Indeed. We made a lower high on the spx on 1st sept, but still no lower low so I am watching for 4330...
On the upside if we continue to drift higher there is a nice gap at 4570... that would be nice!

Tomorrow and 20th are the 2 key dates I think for either outcome.

[gotoPzero]

Tech bubble continues to grow... time for caution!

[gotoPzero]

Any SPY traders on here.... today has been.... interesting!!

[DaveA8]

gotoPzero said:

Any SPY traders on here.... today has been.... interesting!!

I don't sell options against the SPY isn't that good but what I do believe is that the market action needs to be seen in distinct parts. The 0DTE options have against what might have been expected seem to have dumbed down volatility but that ignores that in reality the S+P price over the longer term will be governed by sentiment and forward earnings.
I will admit I was full sure starting the year a recession would happen and we'd retest Oct lows, it wasn't until early May I go my thoughts together and have done ok on the QQQ's but missed a large part also.
The support level for the S+P is around 4200 and then around 4000, I can't recall the exact levels but it seems in the short term that there is no catalyst to retest the Oct 22 lows but as Gary Shilling said in a Bloomberg interview recently that if all the component parts that exist and are recognised lagging but good indicators don't create a recession, then economic history will need to be re-written.
Before anyone jumps at me about talking heads etc, I read these comments/views etc and make my own conclusions.
Without quoting exact figures many companies in the S+P are down 30% from their ATH but held up by other parts, what I do think is the index has the possibility to go the 4600 but to make significant amounts it's definitely about individual stocks or themes for the next few years

[gotoPzero]

I do like it when there is a nice shake out of all the 0DTE'ers by the institutions. Looking oversold going into today, which means naff all at the moment!! GL!

[Sheepshanks]

Chunky drop today across the board and then the news that the Speaker has been ousted - so what will tomorrow bring?

Often it’s the opposite of what you’d expect - maybe the markets will like the possibility of tightening spending.

[DaveA8]

Sheepshanks said:

Chunky drop today across the board and then the news that the Speaker has been ousted - so what will tomorrow bring?

Often it’s the opposite of what you’d expect - maybe the markets will like the possibility of tightening spending.

You’re right it’s absolutely deadly to trade around these things as often it’s just volatility and it can go either way, the reality is shutdowns have had low real effect on the market in the past.
It’s a pity they ousted him because i think he drew more centre thinking voters to the GOP

[WayOutWest]

ooid said:

About two weeks ago Bill Ackman was saying his fund is short in size the 30-year US Treasurys.

I wonder when he will flip to go long the 30 year.

[clubsport]

WayOutWest said:

ooid said:

About two weeks ago Bill Ackman was saying his fund is short in size the 30-year US Treasurys.

I wonder when he will flip to go long the 30 year.

The cash Bond survived testing of the 5% level this morning quite decisively, now trading @ 4,88%.. The fundamentals haven't really changed, so it's too early to say that was the high yield.

Curiously, bond markets historically tend to put in a significant move lower in rates on some kind of catastrophe and flight to quality, rather than buyers just turning up because they look too cheap.

[gotoPzero]

Quite the turn around today so far... bears getting the ropeadope big time in the space of a few hours cleared a lot of them out no doubt.

[Mr Whippy]

FRB has finally painted itself into a corner

[leef44]

With a high average salaries, strong dollar, strikes to push wages higher, stock market near its peak, peak job creation and now treasury yields at an all time high:

is this economically sustainable? Won't this make the U.S uncompetitive for export market? Could this be the point which pushes the cracks beyond a soft landing into a recession or will political games in six weeks' time trigger a shutdown?

[DaveA8]

leef44 said:

With a high average salaries, strong dollar, strikes to push wages higher, stock market near its peak, peak job creation and now treasury yields at an all time high:

is this economically sustainable? Won't this make the U.S uncompetitive for export market? Could this be the point which pushes the cracks beyond a soft landing into a recession or will political games in six weeks' time trigger a shutdown?

All common sense views except none of this matters so long as the US can finance the deficit, that is the real problem and it’s taking longer than expected since the $ is still a safe haven.
The problem is that the Democrats are now reining in spending but interest expense is increasing, what was missed is that a lot of US treasuries were on a 3yr and at 0.5% but these are coming to the end.
Apparently a deputy Treasury secretary recently intimidated that to keep liquidity in the system next year, the US treasury would consider buying its own debt, that’s where the end of the runway is because if they do that it means no one else wants it or already has enough.
Ultimately it’s higher rates or yield curve control and Japan have done that for 33yrs with no real benefit.
Whether it damages stocks over the longer term as opposed to short term volatility isn’t clear but in all honesty it’s probably worse than better as the costs of servicing the debt must depress Federal spending

[leef44]

DaveA8 said:

leef44 said:

With a high average salaries, strong dollar, strikes to push wages higher, stock market near its peak, peak job creation and now treasury yields at an all time high:

is this economically sustainable? Won't this make the U.S uncompetitive for export market? Could this be the point which pushes the cracks beyond a soft landing into a recession or will political games in six weeks' time trigger a shutdown?

All common sense views except none of this matters so long as the US can finance the deficit, that is the real problem and it’s taking longer than expected since the $ is still a safe haven.
The problem is that the Democrats are now reining in spending but interest expense is increasing, what was missed is that a lot of US treasuries were on a 3yr and at 0.5% but these are coming to the end.
Apparently a deputy Treasury secretary recently intimidated that to keep liquidity in the system next year, the US treasury would consider buying its own debt, that’s where the end of the runway is because if they do that it means no one else wants it or already has enough.
Ultimately it’s higher rates or yield curve control and Japan have done that for 33yrs with no real benefit.
Whether it damages stocks over the longer term as opposed to short term volatility isn’t clear but in all honesty it’s probably worse than better as the costs of servicing the debt must depress Federal spending

I'm not clued up in how all this works. If the treasury buys its own debt, is that the same thing as QE? Does this increase its liabilities and interest payments?

[DaveA8]

leef44 said:

DaveA8 said:

leef44 said:

With a high average salaries, strong dollar, strikes to push wages higher, stock market near its peak, peak job creation and now treasury yields at an all time high:

is this economically sustainable? Won't this make the U.S uncompetitive for export market? Could this be the point which pushes the cracks beyond a soft landing into a recession or will political games in six weeks' time trigger a shutdown?

All common sense views except none of this matters so long as the US can finance the deficit, that is the real problem and it’s taking longer than expected since the $ is still a safe haven.
The problem is that the Democrats are now reining in spending but interest expense is increasing, what was missed is that a lot of US treasuries were on a 3yr and at 0.5% but these are coming to the end.
Apparently a deputy Treasury secretary recently intimidated that to keep liquidity in the system next year, the US treasury would consider buying its own debt, that’s where the end of the runway is because if they do that it means no one else wants it or already has enough.
Ultimately it’s higher rates or yield curve control and Japan have done that for 33yrs with no real benefit.
Whether it damages stocks over the longer term as opposed to short term volatility isn’t clear but in all honesty it’s probably worse than better as the costs of servicing the debt must depress Federal spending

I'm not clued up in how all this works. If the treasury buys its own debt, is that the same thing as QE? Does this increase its liabilities and interest payments?

QE seems to have been a central bank, Federal Reserve activity, the inference apparently is that it’s bad because if the Treasury were need to buy their own stuff, it means the FED aren’t buying or buying enough to satisfy the amount being issued and true buyers are not buying.
Whatever the exact mechanism, it’s questionable enough the FED doing it, it’s downright insane that the US government are considering it directly.
It sort defies logic but it is definitely not a positive spend in the frugal or long term sense. How anyone rationally think it’s workable is beyond me.
It smells of money printing but bypassing the FED.

[leef44]

DaveA8 said:

QE seems to have been a central bank, Federal Reserve activity, the inference apparently is that it’s bad because if the Treasury were need to buy their own stuff, it means the FED aren’t buying or buying enough to satisfy the amount being issued and true buyers are not buying.
Whatever the exact mechanism, it’s questionable enough the FED doing it, it’s downright insane that the US government are considering it directly.
It sort defies logic but it is definitely not a positive spend in the frugal or long term sense. How anyone rationally think it’s workable is beyond me.
It smells of money printing but bypassing the FED.

Thanks

[Mr Whippy]

To have money to buy debt from themselves needs money.

They can’t create money. Only the FRB can.

I assume it’s not some weird beginning of their digital currency silliness where they can monetise their future “asset” creation?!


In any case, I believe they’ve all painted themselves into a corner.

The emperor is naked.

It’s just how long people take to admit they’re not looking at a fabulously dressed economy, but a fat old bloke with his hairy balls showing.