Blog – Page 27 – Red Pill Quants

0 The New Old Normal

Implied volatility has been dropping faster than an ACME anvil over the past two weeks, which stands in stark contrast to what I am seeing in the bonds market so the jury is still out whether or not we are looking at some bifurcation here (strange things happen sometimes) or if risk is being improperly handicapped. If it is the latter then we may see another Gamestop type situation unfold in the near term future – if it’s the former then retail traders are about to get a wedgie of biblical proportions.

0 How To Escape The Squeeze Box

A longtime subscriber wrote me the other day thanking me for the opportunity to grab $TLRY right before it kicked into short squeeze mode and exploded higher. In his words: “Not sure if you’ve seen but $TLRY short squeeze is in full blow status. It’s now pre market at 65ish. The only reason I got into it was because I followed your Short Squeeze setup. I got in at 22.61!! I only had a small position, but it’s going to pay for the cost of the strategy probably about 3000%! And it was a textbook entry on your system.”

0 You Got PUNKED!

So my wife comes running to me a little over a week ago with that determined look on her face which immediately tells me that I’m in big trouble. “Mole, drop everything you do. We’ve got to buy silver! A LOT of silver!” No she doesn’t call me Mole but it’s my story and I’m sticking with it. Anyway, I immediately realize that I better tread carefully now. “Why is that again, my dear?” I ask innocently. She puts her hands on her hips, rolls her eyes, and retorts: “Well duuhhh, EVERYONE is talking about it right now – it’s going to explode higher!”

0 The SKEW Must Flow!

An old friend wrote me over the weekend asking whether or not it was finally time to back up the truck and short the heck out of this market. My response to him basically boiled down to ‘never step in front of a speeding freight train’ – however true to form I did provide him with a few valuable pointers. Which I thought may actually make for a good post, so if you happen to currently suffer form bearish inclinations I suggest you put down your mobile enslavement gadget and pay attention.

0 Can You Spare A Dollar?

Just ask the Fed and the answer should be ‘how many trillion would you need’? Which why it’s a bit puzzling that the old greenback actually seems to be bottoming out right now and may even be getting ready to put the squeeze on all those degenerate Euro fanboyz. As you can imagine the thought of not being taunted by my local ATM anymore fills me with much glee. But in the context of the overall market situation we’ve got a few charts to review. Let’s get to work.

0 A Funny Thing Happened On The Way To Wall Street

So a funny thing happened on the way to Wall Street last week. A rabid rabble of Robinhood retail rats on Reddit took advantage of a perceived market inefficiency in Gamestop (GME) and decided it would be a fun idea to drive up the stock and in the process stick it to the ‘man’ as an extra bonus. As you would expect it didn’t take long until all hell broke loose, for the high priests of finance don’t enjoy seeing their sacred privileges challenged. So they did what any self respecting incumbent would do: They decided to make a phone call…

0 The Worst Month Of The Worst Decade

Clickbaity enough for you? I think we all can agree that February is bad enough even during regular non-epidemic years. Let’s start with the spelling which makes no sense whatsoever and is impossible to pronounce as a foreigner no matter how long you practice. Ask your Chinese friend. The weather sucks and there are no holidays or vacations to soften the blow. Valentine’s Day is depressing no matter what your relationship status may be. Too much negativity? Wait there’s more, I’m just getting warmed up.

0 Flattening The Curve

Remember just a little under a year ago we were told that all that was needed to get back to normal was a 2-week lockdown in order to ‘flatten the curve’? Those were the days! But no worries, we are most definitely NOT going to bitch about the COVID crisis today. Instead let’s be productive and go over two exotic concepts that are usually relegated to a small group of insiders active in the commodities futures market: Backwardation and roll-yield.

0 Full Speed Ahead

The retail option bubble continues higher with institutional traders watching on in utter awe as to the outright insanity that is taken place in front of their eyes. And of course are taking full advantage per the old aphorism that a fool and his money are soon parted. This is going to be extensive as I’m literally going to bombard you with charts and graphs today. So grab yourself a cup of Java or whatever non-GMO organic sustainable cruel-free tasteless concoction that tickles your fancy, strap yourself in, and get ready for a wild ride.

0 I For One Welcome Our New Tech Overlords

Okay, not really as I’m a cantankerous old fossil who still clings to his 5 year old iPhone 5SE (I hate large phones and anything > 4 inches is competition). But that also means I’ve been around the carousel a few times and therefore recognize a premium setup when I see one. And let me tell you – big tech was literally throwing itself at me last Friday. And to no surprise a few small gambles taken then have all paid off in spades. Let’s review – or in case you missed out (again) – watch and weep:

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