Yo Pit Crazies,

The Prince of Macro, Bill Griffo, gave his all last night for Power Income Trader.  He has traded billions of dollars in bonds during his career.  Bill slays it for Option Pit so learn from a Bond Pro now that the Bond Man has come to town. Join him right here.

The Bond Man.  For years the Bond Man is like the boogie man who hides in the closet only to come out and scare everyone until they are witless.  Think Monsters Inc from Disney and you get the picture.  Why is this my least favorite chart of the year?

You’ll have to click through to see why.  It has something to do with Griff but I will not spoil the fun,

Find out why this is so scary…

One-way markets are nearly impossible to price

What I teach my students in OP Pro and all my services is that to be successful you have to put yourself in the shoes of the liquidity provider.  If you want to be successful, understand what your customers want in any business. Options are slightly different in that the liquidity provider provides what you want at a scaling price.  If I buy a Big Mac, it costs $3.50, no matter how many I buy. Options are not the same. Volume changes the price.

When the IShares Barclays 20+ Year Govt Bond ETF (Ticker: TLT) goes straight down for a year I take notice, that TLT is on that path with increasing IV.  That suggests this path is still uncertain.  Readers of my OP Newsletter know I think the Fed is raising rates to stifle government spending.  Nothing on the current path that dissuades me.  The fact the US Senate has tried to kick the can only reinforces this notion.

We need to see something that changes the interest rate trajectory. Unlimited government spending is not the answer.  I expect stocks to trade negative until some reality sinks in.

To your trading success,

AG