Not shocked that the Fed leaked to the WSJ yesterday about
the potential for 50 bps cut, but I think the market has the
highest probability of experiencing a crash like event on a 50 than
a 25. The problem is, they kind of need 50 to follow the rest
of the world and keep the dollar weak and they can't just go on
stage and say "look people, I don't know what you're smoking but
this nonsense about strength when GDP is under 3 and Gov spending
is above 6 is nonsensical" The market would crash...so they
are trying to wiggle their way into position and end up coming into
the week with a nearly 50/50 choice between the two (and that took
them leaking to Nick at WSJ). They're in a pickle.
Find the last time we went into Fed week with a 50/50 outcome
on the board. Good luck.
Fascinating event coming up. Jerome cannot be completely honest
about needing 50 (that's 100% honest) but he needs to essentially
crash the dollar ASAP (keep crashing it). He's a saint, so the
election plays no part in his thinking, but I'm sure the market
does (e.g. he doesn't want to spark a crash). If I was stuck
in his position, I would do 25 and hint in very strong ways, just
short of coming right out and saying it, that there would be AT
LEAST a 50 cut in November. The dollar would dump immediately and
the banks and wealthy would cheer. I'm just not sure how he
accomplishes that with hints (you know he's not going to say it
directly). And, I still think he is riding a fine line to
significant weakness because emotional humans are trading, not
machines that realize that QE is either here already or coming
quickly.
Or maybe he's playing 4D chess and leaked the 50 to get some
shock value out of the 25 and plans to make up the difference ++ in
the background with QE (e.g. many people will be thinking something
is very wrong if 50 so they might be shocked in a positive way with
a 25, whereas it didn't have that kind of dynamic embedded before
the leak).
Nice commentary and I agree JP has once again pickled himself.
Can you explain why crashing the dollar is a good choice? Does it
continue the liquidity squeeze to SPX 6-7-8000 in the final Wave 5
blowoff top to give cover to his obvious candidate of choice? Or
will any confirmation by him spook the market because once again
the Fed is late and recession is already here (although the lagging
stats aren't confirming...yet) As king for a friend :)
BTW I thought the -750 dip this week was weird but these
positive gamma short squeezes are bs! Investing has been replaced
by casino craps and really gets old! Even though I actually did a
few of the system trades and made $$$ (Thanks, Matt!!!!) and
finally got out of PCT trade from a few months ago -- the V moves
are so manipulated that nothing seems 'real' anymore. Without BPT
I'd probably just still be 50% TBill and 50% RSP.
Long story short - dollar strength (over a certain level) has
been a consistent sign of dysfunction in the global economy in the
era of globalization. I love a strong dollar as a traveling
American, but I also get that if you crush your trading partners a
global recession will eventually come back to bite us all (I'm
definitely not saying I agree with the approach - only that I
understand it...to the extent a non phd economist can understand
it).
Agree about casino. I find it a bit gross and obscene to profit
off stealing from the middle class and poor like this, but at least
it's predictable these days. I was buying almost zero cost spreads
near the bottom that have absolutely exploded. For example, I
had a bunch of
SEP 18 5600 (+1)
OCT 4 5700 (-1)
OCT 4 5800 (+1)
They absolutely exploded higher this week.
I had the same setup going to the downside. Because I had
most setup as nearly zero cost and a credit in some cases, I lost
very little on the downside put protection, but I could sleep
knowing I was good if we opened up down 150 SPX points (or more).
This trade required massive movement in a short time to work.
But that's what we've been getting, so it was a no brainer to put
it on in size.
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Full banana mode confirmed Not shocked
SPY 5m - H&S setting up. Given the amount of ...
Posted by bthefnd on 13th of Sep 2024 at 01:26 pm
Full banana mode confirmed
Not shocked that the Fed leaked to the WSJ yesterday about the potential for 50 bps cut, but I think the market has the highest probability of experiencing a crash like event on a 50 than a 25. The problem is, they kind of need 50 to follow the rest of the world and keep the dollar weak and they can't just go on stage and say "look people, I don't know what you're smoking but this nonsense about strength when GDP is under 3 and Gov spending is above 6 is nonsensical" The market would crash...so they are trying to wiggle their way into position and end up coming into the week with a nearly 50/50 choice between the two (and that took them leaking to Nick at WSJ). They're in a pickle.
Find the last time we went into Fed week with a 50/50 outcome on the board. Good luck.
Nickileaks remains their mouthpiece
Posted by steve on 13th of Sep 2024 at 01:27 pm
Nickileaks remains their mouthpiece
Fascinating event coming up. Jerome
Posted by bthefnd on 13th of Sep 2024 at 01:43 pm
Fascinating event coming up. Jerome cannot be completely honest about needing 50 (that's 100% honest) but he needs to essentially crash the dollar ASAP (keep crashing it). He's a saint, so the election plays no part in his thinking, but I'm sure the market does (e.g. he doesn't want to spark a crash). If I was stuck in his position, I would do 25 and hint in very strong ways, just short of coming right out and saying it, that there would be AT LEAST a 50 cut in November. The dollar would dump immediately and the banks and wealthy would cheer. I'm just not sure how he accomplishes that with hints (you know he's not going to say it directly). And, I still think he is riding a fine line to significant weakness because emotional humans are trading, not machines that realize that QE is either here already or coming quickly.
Or maybe he's playing 4D chess and leaked the 50 to get some shock value out of the 25 and plans to make up the difference ++ in the background with QE (e.g. many people will be thinking something is very wrong if 50 so they might be shocked in a positive way with a 25, whereas it didn't have that kind of dynamic embedded before the leak).
Nice commentary and I agree
Posted by profmel on 13th of Sep 2024 at 01:52 pm
Nice commentary and I agree JP has once again pickled himself. Can you explain why crashing the dollar is a good choice? Does it continue the liquidity squeeze to SPX 6-7-8000 in the final Wave 5 blowoff top to give cover to his obvious candidate of choice? Or will any confirmation by him spook the market because once again the Fed is late and recession is already here (although the lagging stats aren't confirming...yet) As king for a friend :)
BTW I thought the -750 dip this week was weird but these positive gamma short squeezes are bs! Investing has been replaced by casino craps and really gets old! Even though I actually did a few of the system trades and made $$$ (Thanks, Matt!!!!) and finally got out of PCT trade from a few months ago -- the V moves are so manipulated that nothing seems 'real' anymore. Without BPT I'd probably just still be 50% TBill and 50% RSP.
Long story short - dollar
Posted by bthefnd on 13th of Sep 2024 at 01:58 pm
Long story short - dollar strength (over a certain level) has been a consistent sign of dysfunction in the global economy in the era of globalization. I love a strong dollar as a traveling American, but I also get that if you crush your trading partners a global recession will eventually come back to bite us all (I'm definitely not saying I agree with the approach - only that I understand it...to the extent a non phd economist can understand it).
Agree about casino. I find
Posted by bthefnd on 13th of Sep 2024 at 02:05 pm
Agree about casino. I find it a bit gross and obscene to profit off stealing from the middle class and poor like this, but at least it's predictable these days. I was buying almost zero cost spreads near the bottom that have absolutely exploded. For example, I had a bunch of
SEP 18 5600 (+1)
OCT 4 5700 (-1)
OCT 4 5800 (+1)
They absolutely exploded higher this week.
I had the same setup going to the downside. Because I had most setup as nearly zero cost and a credit in some cases, I lost very little on the downside put protection, but I could sleep knowing I was good if we opened up down 150 SPX points (or more).
This trade required massive movement in a short time to work. But that's what we've been getting, so it was a no brainer to put it on in size.