iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,899 Blog Posts

THE RALLY COLLAPSES, NIGHTMARE ON WALL STREET UNFOLDING

The bond market is causing a disruption in stocks thanks to soaring 2 yr bond yields and falling 10s. The spread between the two was is 71bps — still a very decent and profitable level but the trend is, inexorably, lower. If that yield curve flattened it would be accompanied with a crescendo of pundits who would then declare a recession was around the corner, since the flattening of or inversion of the yield curve is our best predictor of economic angst.

We went from +200 NASDAQS to swimming in a sea of red and the day is young and filled with terrors.

The NASDAQ is down 140 and I, once again, was forced to liquidate early and then hedge. Then we had a bounce so I added to both FNGU and WCLD and then we plunged again, and then I hedged again. All in all, my damage is limited, down 60bps — but my YTD losses now exceed 10%. Even worse, when markets do lift for 30 mins in the morning and everyone else is drinking champagne out of their trophies — my gains are almost always limited to 1%, due to my risk aversion.

I cannot get behind this market, even for an oversold bounce, when the patterns are horrendous and this is exactly what that is.

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5 comments

  1. Mr. Cain Thaler

    The dollar index is up like 1.5% in the same time.

    The most counterintuitive aspect of all of this is that cash is going to be the best in show “non-short” asset in the midst of thr worst inflation we’ve had in at least 50 years.

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    • Mr. Cain Thaler

      Well…certain bonds will actually be the best in show. But knowing which ones and the entry prices is unpredictable.

      And you’ll have to hold them all the way to maturity. Get cold feet and you lose a toe to frost bite. You’re sacrificing mobility for months or years.

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  2. Mr. Cain Thaler

    Holy ape rape, batman. Natty prices just exploded +44% on the front month.

    I went straight to the NYMEX to verify. What the hell just happened?

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    • bob smith

      “What the hell just happened?”

      What happened is you talk too much. Do you have any friends? How about getting a dog or something? The dog won’t talk back but at least he won’t get tired of your constant babble.

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