Markets always obsess over several key metrics during every crisis. Back in 2008, we obsessed over banks and oil. During 2022, we are looking at CS, and obsessed over interest rates and the dollar. In order to sustain this rally, we need euros to gain against dollars and we need bond to recover, or at least stabilize. If those things happen and we are not entreated to a horrific series of earnings warnings, we should rally 5% in October, maybe more.
On the other hand, since we are so oversold and since losses are so great, should the CS crisis metastasize, which often happens during bank runs, and yields keep climbing because of inflation — we could very well get rocked for 15% in October.
5% up, 15% down.
As for me, 85% cash, 5% UVIX, 10% BITO. I will begin to position for tomorrow after 3pm.If you enjoy the content at iBankCoin, please follow us on Twitter