Tracker Updates

10Y Yields topping?

We continue with earnings week and in the spot light will be Tesla and Netflix, we will take a look at the options in these later today to gauge sentiment and will post our findings. J Powell speaks this week as well so will see if he has anything of note in regards to the expected landing path for the US economy. As far as the markets Friday saw a big jump in Gold and Silver, some decent short covering for sure amidst the Middle East turmoil, we do not think this is a reversal of the trend but a more consolidative over sold market move. Alright let’s take a look at the US Govt 10Y yield chart where the 5% area seems like a formidable resistance point:

We know we are in a higher for longer regime and that funding costs have gone way up, but in reality the global dollar shortage is evident and usually collateral damage starts to show up and the global central banks are forced to pause or cut in order to stem the tide of defaults, downgrades and impending further doom. We must stress that the amount of debt in the system in the long run is deflationary not inflationary and what we want our readers to understand that it only takes a very small amount of contagion before all hell breaks loose. We believe the central banks understand this and are starting to see the cracks forming. We do not believe the FRB will raise rates again for this cycle, there really isn’t a need, the bond market has raised it for them which is evident of the US 10Y yields approaching this 5% area. We also know bank credit is super restrictive and that is the direct form of tightening as well.

Alright here are Friday’s settles with Gold the big winner and the Nasdaq the loser (Dax in EU was down big as well):

As far as our positions tracker, we unfortunately have the bearish sentiment on Gold and thus the tracker absorbed this, but there are no changes to note:

As far as the MEGA8s, the hedge this week has moved to the Oct 20 Expiry and the 368 Calls. The hedges are performing their job and after starting out the week underperforming the markets sell off assisted the hedged programs outperformance as the MEGA8s gave back some big ground on Friday:

Ok we will be back later today, we expect the markets to move around so the are up slightly in the equities today but we would expect a revisit to the downside to test resolve, we would be shocked to see a positive close on the SP500 today let’s put it that way, with all that is going on, even the strongest non zero sum player won’t be stepping out to bid, not for anything but a quick forced move up, but we do not expect bids to have any substantial footing here to start the week.

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