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Bits And Pieces
Howdy all. Some updates from my end. I’ve been quite busy trading and as the historical volatility in the bond markets start to unwind, its allowed me to release some thoughts via a blog post.
In case you noticed you’re exhaling for the first time all day, its because bond volatility is starting to subside. Below is the MOVE index which tracks treasury volatility. Think VIX but for rates.
However: 10-year skew, bid.
Skew vs MOVE
Overall, the market conditions have been favorable for risk. Relentless moves in the regional banking sector have only brought us back above 4000 in the S&P and has qualified DeMARK upside propulsion to the 4400 level on the higher time frame.
We going to 4.4k tomorrow? Hell no. Especially after that Bloomberg headline and bonds down 3 days in a row into month end, I would be shocked if we don’t cause hurt tomorrow.
Bond market started caring above inflation expectations again. Here is the June long bond against front month Crude
Some of the EM names are really starting to peak my interest. I own a small position in Alibaba which has seen a nice surge as of late on the backdrop of a standard-oil style break up. This evening we are starting to hear some chatter about share buybacks too.
China relative to EM (FXI:EEM)
FRC is looking like it has found a level at around 12. I’m not going to pretend like I’m certain about any idea here, but this is moving with vigor and a break above the 15 area into the back half of the week could mean it revisits >20 pretty quickly.