Yo, Pit Crazies,
It is amazing how fast central bankers can resemble a James Bond villain …
Ten years of enabling the market, which Ben Bernanke got a Nobel Prize for, and all of a sudden no easy credit for needy markets.
The answer is no.
Makes me also think of the Soup Nazi from Seinfeld.
No soup for you!
The Fed could use some help from Uncle Sam, and maybe they could propose spending less money. The Fed has to choose, since the US government is in denial. (And according to famed economist Milton Friedman, all inflation is government created. He was practically never wrong!)
Is there any hope for stocks this week?
The Good News: We Are At the Bottom
The bad news is … we are at the bottom so new lows will be painful.
The good news is that there is a lot of upside.
This is the most volatility-laden CPI number this year. VIX is not at highs from Russia, the energy crisis or supply chain issues It is all expectations on what the Federal Reserve will or will not do.
This is a bad place for traders since everything is a binary switch.
You need to be a little long and a little short to survive this.
In the Vol Trade Club, I bought a VIX Oct. 19 32.5/40 call spread and a 30 put for 2.40. I don’t see how VIX stays anywhere near 30 over the next week.
I don’t see how the S&P 500 Index (Ticker: SPX) stays within 200 points of where we are now over the next week.
As Julius Caesar said, “Alea Iacta Est.”
Will the Fed cross the Rubicon?
The Rundown
Power Income Trader
Bill rocked some IShares Russell 2000 ETF (Ticker: IWM) put spreads for a 90% gain.
Big Money Flow
True to the name, Mark hit some Cinemark Corp (Ticker: CNK) puts for a 79% gain.
Pro Chat Room
Cat is trading like a Cat on a Hot Tin Roof lately:
To Your Trading Success,
AG