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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (189093)	6/22/2022 10:35:24 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217553

To: carranza2 who wrote (189093)	6/22/2022 5:20:39 PM
From: TobagoJack	Respond to of 217553

Need to thunk zerohedge.com The oil "fall out" Wednesday, Jun 22, 2022 - 23:30 Black gold isn't immune Oil is falling hard today. We outlined our bearish logic on oil last week in our thematic email "What if oil is falling out" ( here), and we stick with the non consensus view. It is falling below the trend line that has been in place since early December as well as taking out the 50 day. Note we are trading at the 100 day moving average here. A lot of broken dreams today... Source: RefinitivOil - is it different this time? Remember the 2008 similarity when oil refused to react to the back then ongoing equities bear ( here)? Oil tends to catch up and does so quickly. Back then we had the GFC situation and things are different this time around, but it looks like oil has decided to "adjust" some of the denial vs equities... Source: RefinitivRecall the "old" oil vs equities connection? It is not perfect, but there are similarities when it comes to the human psychology. Source: RefinitivCommodities struggle post inflation peaks Commodities tend to struggle past peak inflation, but can hold up if a recession is avoided or if inflation peaks at elevated levels as it is currently the case. Source: GoldmanSo when is "peak inflation"? Goldman economists now forecast a deceleration in US inflation in 2022Q3. Similarly, in Europe GS economists expect headline inflation to peak at 9.4%yoy in September. Goldman: "We think an inflection in activity and consumer data over the coming months, coupled with a slowdown in wage growth (which seems to be underway) and a recovery in global supply chains, could foster confidence that the US economy is getting closer to an actual peak in inflation" (GS) Oil realizing the inflation connection Just in time for when the last bear threw in the towel and went bullish oil, black gold decided reversing sharply lower. Chart showing the gap between oil and 10 year breakevens shrinking... Source: RefinitivOil and rates It worked on the way up. Is oil front running rates moving lower? Source: RefinitivOil volatility and the MOVE Oil is an extremely complex asset to trade and it does have a lot of cross asset features to it, especially at various inflection points when it decided "catching up" to various "narratives". Chart shows the gap between oil volatility, OVX, and bond volatility, MOVE. There is connection between these two assets not to be neglected. Source: RefinitivDon't forget the USO puts On June 16 we suggested looking at the downside set up for oil ( here). We wrote: "We like to ask the "what if" question and then look for the "convexity" opportunity. Oil is one of those "what if" questions at the moment." We suggested looking at relatively cheap "optionality" in July via either put spreads or just outright long puts. Anyway, as oil has fallen quickly since then, make sure to adjust the strikes, i.e roll them into new strikes in order to "max" out the options "juice". One strategy is to book some profits, and roll into new lower strikes. Source: RefinitivThe daredevil trade - part 2 It was only on Friday we suggested the "daredevil" trade, +TLT-USO. It was based on our latest bearish oil logic here. Anyway, since then the trade has performed very well, but when you zoom out you realize this has more legs to it. Make sure to adjust any downside options trades in order to maximize the "greeks". Source: RefinitivAnd it is gone We are talking about the BCOM energy taking out the 50 day moving average. The steep trend line is gone since a few days ago. Recession anyone? Source: RefinitivRecession anyone? Just in time for when everybody only saw upside for commodities, the entire space decided reversing sharply and has taken most by surprise. These are nasty moves and are causing a lot of p/l pain out there that risk spilling over to other assets. Source: Refinitiv Sent from my iPad