New bull, soaring greed and affordable hedges
Getting there
Extreme greed is here. We reached a slightly higher reading in Feb this year...
Source: CNN
Source: CNN
The great put hate is back
The crowd has managed buying puts at local market lows and puking puts at local market highs. Is this time different, or...
Source: Tradingview
The panic to "unpanic"
Skew continues to collapse. The SDEX is trading at the lowest levels since "it all began". Haven't seen such a reprice of downside protection in a long time. Bullish or bearish here, but hedging the downside hasn't been this cheap in a while...
Source: Refinitiv
Straddles are cheap
Next week will be busy with: CPI Tuesday, FOMC Wednesday, China stats Wednesday, ECB Thursday and BoJ Friday. Goldman's derivatives guru, Garrett writes: "...last year there were over 50 trading days where the daily implied move was larger than what is currently priced for the upcoming entire week (not a typo)"
Source: GS
Fresh bull
Stats via BofA's Savita: "...after crossing the +20% mark from the bottom, the S&P 500 continued to rise over the next 12 months 92% of the time (vs. avg. 75% overall), returning 19% on average (vs. 9% avg. overall) based on data back to the 1950s."
Nikos on the disconnect
The "gap" between bonds and equities has continued to widen. Main bullets via Nikos:
1. Large disconnect between bond and equity markets' pricing of macroeconomic uncertainty.
2. Bond markets anticipate prolonged macroeconomic uncertainty; equities seem optimistically priced.
3. Aligning equity markets' pricing to bond markets' expectations could lead to 20% downside.
Oil and the recession
Does oil know something?
Source: BofA
Big in Japan
Japanese inflation continues to accelerate (ex-subsidies).
Source: Haver
The delta of the world's biggest delta...
....is negative. NASDAQ spiked when Fed's BS "delta" (rate of change) moved higher in March. The "delta" has been fading over past weeks. Will NASDAQ start to notice?
Source: Refinitiv
Widening further
The VVIX vs VIX gap getting wider today again...Pay close attention.
Source: Refinitiv
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