Yo Pit Crazies,

Once again we made a run to a 30 VIX. 

Stocks are unhinged (or about to get unhinged) because traders are worried about a systemic collapse. Generally when VIX closes about 30 – into Zone 4 – the market is running into the madness of total uncertainty. 

We have not been able to hold 30 even though we have hit it twice. 30 VIX twice in a week is for sure smoke, but not yet fire. 

Once again, we have an extreme condition, so trade the extreme condition.

That’s right, trade for madness.  Expect the madness to continue for a couple weeks at least.

Credit Suisse Is Getting A 50 Billion Dollar Loan

The Swiss Government is letting the Credit Suisse Group AG (Ticker: CS) access massive dollars to help with impaired bond portfolios. The problem is how many banks are holding government securities that are getting marked lower, as interest rates skyrocketed on G7 government spending.

As of now, markets are not really reacting to the news. Why? Well, the Fed announced something similar this weekend and now the Swiss. 

Where there’s smoke, there’s fire … until there isn’t. 

On a positive note, the Fed starting raising interest rates until something breaks is the popular refrain. 

Banks are breaking, but will G7 Governments do their part and stop spending? 

The Biden Administration’s budget is all tax hikes and more defense – someone is still not getting the message. 

Will Congress step up? This all remains to be seen.

VIX will stay elevated until the Fed meeting on Tuesday and could hit 30 again on rumors or another bank needs money. 

The smoke signals are coming out fast and furious … is the Fed listening?

To Your Trading Success,

AG