We’re likely to trade rangebound until 3:30, at which point the market will either spring higher or fall to pieces.
Art lays out three primary risks to this tape.
1. Political uncertainty
2. Credit market worries, highlighted by the fact that JNK is down 7 days in a row
3. Trump’s tax cut bill is dead
Add these things on top of an already frothy tape, beset by amateur speculators and weak hands, and there is a significant risk here for further downside.
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The biggest thing that has me on the fence about holding any size in long vol right is that we’re so close to front month vix expiration and then right after options expiration. Market will do what it does, but typically vol gets a beat down into expiration. At the very least something I’ll be leaving room for as an expectation. Flat right now, sold the gap up.
I think any front month shenanigans are basically done as of today. Yesterday was a 140bps spread over spot. Now it’s a 40 bps spread.
They sure are selling the crap out of vol as of the moment, we’ll see.
Great and foresighted call:
We’re likely to trade rangebound until 3:30, at which point the market will either spring higher or fall to pieces.
The rigged market will trade up unless it trades down. duh.
Indeud. The gimlet eyed one says whats what.