Down But Not Out

3 weeks ago

I received a few emails asking about my posting schedule this week, and clearly it was from people who had not seen the heads up I posted last Sunday. So, just to ease everyone’s mind and to stave off further inquiries here’s the elevator version of what’s going on: I had eye surgery yesterday (acquired strabismus) which prevented me from putting up a post. Everything appears to have gone well, meaning I can still see with my left eye but my face looks like as if I just went three rounds with Lennox Lewis. And that’s pretty much how I feel as well, meaning I’m still a bit out of it.

For anyone who cares – otherwise feel free to skip down to the first chart: This was supposed to be a 45 minutes outpatient procedure performed with only local anesthesia. Nevertheless I happen to be quite sensitive to medication and a minute after they injected me with some tranquilizer I was out like a light.

The last thing I remember pre-op is the nurse warning me the local anesthesia around my eyes would sting a bit, and me telling her not to worry but that I wanted a lollypop afterwards. Next thing I am waking up with a bandage on my eye – about four hours later. Apparently I missed all the fun and obviously I’m not too broken up about it. I guess if I was a drug addict my dealer would have to drive a lease to keep up appearances.

The jury is still out on whether or not the procedure actually was a success. The eye muscle was cut in two places (as it separates into two strands to move the eyeball) and as it’s swollen with internal stitches the final alignment will not be apparent until a few weeks from now. I choose to be positive however and if I have to go back under the knife then that’s what I’m going to do.

One interesting tidbit I wanted to share and it’s something I actually learned way back when I was experimenting with stereoscopic 3D in a different life: Some kids are born with really horrendous strabismus and in the first few years they attempt to correct the condition with special glasses that force both eyes into the proper direction.

When that fails it means you’ll have surgery BUT it comes with a caveat. Turns out that stereoscopic 3D vision is actually something our brain has to learn at an early age, within the first two years of your life. If you don’t acquire that ability and then later have your eyes corrected you will see a proper image but your brain will never be able to see depth as most of us take for granted.

Really fascinating and it shows how plastic the human brain is at an early age. Maybe future generations will be moving artificial limbs via implants they received when they were toddlers. Scary but I’m sure some mad scientists in some secret government labs are already working on stuff like that.

Alright, on to some fun and games. And boy oh boy are things getting interesting. An ambiguous Fed has left the market sort of guessing as what’s ahead and true to form the bias appears to continue to the upside.

We haven’t seen the VIX this low since the pre-COVID-19 days and this opens up exciting opportunities for any self respecting options trader.

This is what I’m talking about – note how IV across the chain has dropped significantly with next Wednesday scraping ground near the 15 mark.

But all is not well in paradise as I see very pronounced divergences across various asset classes:

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  • Mike
  • 3 weeks ago

About the Author

Hey there, I am one of the founding members of Red Pill Quants. I used to work as a systems engineer in Silicon Valley until I left the industry in 2008 to become a full time quant trader. It's been fun ever since.

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Written by Mike at Red Pill Quants