Rude Awakening

UPDATE 9:38am EDT: I just skimmed the headlines (it’s early in L.A.) and the bulls finally got their concerted worldwide rate cut (0.5%). Nevertheless futures are down and recovering only slightly after getting hit by reports of worse than expected Sep retail sales. Also, the despite the spin about the rate cuts, today’s ‘effective federal runds rate’ this morning was actually 2.97%. The last time it was that high was on Sep 17th, and you know what happened that day. TNX down at 34.6% but recovering a little bit, and Yen dropping (good for market).  I can say with reasonable confidence that things are out of control out there. Keep it clean and trade what the market tells you, not what you want the market to do.

UPDATE 11:03am EDT: I keep watching the TNX push to new highs and equities are not able to follow suit, which is a bit unusual – appears that correlation is falling apart today (money not flowing back into equities). YM seems to find a seller at 9400 and a buyer around 9275 (straddling the 9325 pivot). Yen keeps holding its weight, so unless something breaks towards the upside this market is going to tank again today. Disclosure, I’m still heavily delta negative. Bought some DIA calls to play the pivot but I will dump them once we breach 9275 with conviction.

UPDATE 11:47am EDT: I have to admit I’m puzzled. The TNX is on fire today but I don’t see the equities follow suit in any convincing way. So, can anyone explain to me where the money is flowing to? You can’t just go and withdraw your assets and go into cash if you have $100 Million or more floating around out there.

UPDATE 12:07pm EDT: Just heard that ten years TODAY was the last high of the VIX – October 6th 1998 at 60.63. Coincidence? Will today be another high? 😉

UPDATE 2:43pm EDT: I just reloaded FSLR at the top – let’s wait and see if that was either a genius move or a very painful mistake 😉