Yo Pit Crazies
Two years of loose fiscal policy and quantitative easing are starting to roost.
Bigger inflation numbers are making market players think twice about how fast the Federal Reserve can actually raise rates. The central bank might have to take the aggressive path.
Here are three assets I see going in the wrong direction:
- Gold: SPDR Gold Trust (Ticker: GLD)
- Bonds: iShares Barclays 20+ year US Gov bond ETF (Ticker: TLT)
- VIX: The Cboe Volatility Index (Ticker: VIX)
I think a big fund blew out.
Something isn’t right – so let’s take a look..
Treasury Bonds should be a safe haven
Ever since the Russians invaded, the iShares 20 Plus Year Treasury Bond ETF (Ticker: TLT) has been a one-way trip to Palookaville.
I think a fund might have been long stocks and long bonds as a hedge.
As you can see, stocks and bonds have not fared well in 2022.
TLT two-month chart with one-day candles.
Gold is back to where is started a year ago …
One-Year GLD Chart with one-day candles.
Now take a look at VVIX, the implied volatility of VIX …
Six-month VVIX chart with one=day candles
- VVIX is not at a high with SPX moving 3% a day
- GLD is not at a high with inflation running nuts
- TLT is no longer a safe haven as rates to … 4%
However, we have been able to navigate the maelstrom in my Option Pit Mentoring classes.
>> Tune in today at 12:15 p.m. during a no-cost live session to see how. <<
The Rundown
Option Shopper
Licia must be hitting the ATM one too many times because her SPDR Select Financial ETF (Ticker: XLF) calls closed for an 80% gain yesterday.
Big Money Flow
Mark went back to the well in Ares Capital Corp (Ticker: ARCC) May 20 21 puts for a 100% gain!
OP Mentoring
Our first Option Pit Essentials training is here … musing on calls and puts.
To Your Trading Success,
AG