Capitulation Alert: Bearish USD?

  NFP came in weak, as expected. On the release, $GC1! spiked, $DX1! dove and $ES1! tanked. Again, all par for expectations. That said, no sooner than 6 minutes after the release, $DX1! was already trading higher than pre-NFP. Could that be a signal of capitulation on the bearish dollar trade? Yes, that’s a gutsy […]

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Earnings Options Play: $DATA

$DATA has a recent history of massively underpricing implied volatility! Heading into the last six earnings reports, $DATA options underpriced the next day move by an average of 50%! Talk about buying volatility at a discount!  Right now, $DATA options are pricing in a 13% move, down from a steady 18% move all week. I jumped into […]

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Housing troubles to continue?

Despite lower raw material costs – for nearly all of 2016, housing (via $ITB and $XHB) has consistently underperformed the broader S&P 500. Year-to-date, housing related stocks ($XHB) are down 3.4% and homebuilders ($ITB) are down 3.0%. Is this weakness set to continue? The data says ‘yes!’ Demand is rolling over as yields are backing up and while supply […]

/GC Option Expiry Dealer Risk Analysis

I’m little late in posting this and it’s a little less useful now, with Gold having spiked higher post the horrible durable goods data this am. Nonetheless, here’s how dealer risk is looking ahead of the 1:30pm options expiry for Gold futures. The 1200 and 1275 levels fall well beyond the average maximum move range for […]

Update on Gold Short

Since posting about my “weird feeling” towards Gold’s price action on Tuesday, we’ve seen some major mixed moves in Gold futures and I’ve been able to perform some additional analysis worthy of an update. In full disclosure, I added June 1200 puts on Wednesday, but I did not end up putting on the long Gold derivative hedge I contemplated earlier in the week. […]


Weird day for Gold

Sometimes, in the market, I get a weird feeling, where something just seems off. Today was one of those days. Gold’s price action just seemed off. I like to use correlations between different asset classes to help shape a narrative for how the market is trading. While the longer duration correlation data fails to support a “risk-on”/”risk-off” […]


Helicopter Money: Nah, That Would Never Happen…Think Again!

  I’ve long understood Friedman’s concept of “Helicopter Money,” but until last year, I had never explicitly encountered the term outside of academia. So when I saw an FT article mention “Helicopter Money” as a possible last resort alternative to QE, I instinctively dismissed it as hyperbole. Since then, however, I’ve noticed the term popping up in more and more places. […]