I gave up on the whims of destruction and hold a long only book into Monday. This decision was made as I sweat cold here in a haze surrounded by digital assholes who happen to be trading inside The Pelican Room. There is little I can do about a Frankenstonian culture I myself created and now just have to deal with the monster I made, as it turns on me — it’s creatooor.
I lost money in an otherwise layup of a session; but my quant made coin.
There was an OS signal on IWM just before the rally, which now with the benefit of hindsight was prescient.
As for Monday, my position is bullish; but my heart is still hoping for a total annihilation. I only closed out my hedges because they seemed wasteful, given the broad based rally and reasoning for the rally. I am somewhat convinced the war in the Ukraine is guiding stocks and when it goes in favor of NATO — stocks jump and vice versa. I will warn those who are permenently bullish to remember the Fed is going to hike your fucking faces off into the bankruptcy court, should stocks and commodities continue to go up. This is NOT what the Fed wants. The Fed explicitly stated “pain” and a slowing down of the economy, which by the way doesn’t include rapidly rising equity and commodity prices.
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Our boy Tyler seems to feel that the Fed committing to 3% inflation target would let assets rally.
I’m not saying it wouldn’t trigger a reflex rally. But risk assets are pegged to the 10y, not the federal funds rate. If that happens 10y is even more toast than it already is. Risk assets need the Fed to kill the economy so they can get back on life support.
That pretty much adds 100 basis points straight to the 10y. Little less because the forward years are pumping along at 8%+