Rich Dvorak

I like trading markets. Nature is cool too. Opinions are my own. Let’s connect! (formerly RichDvorakFX)

[Kris Sidial🇺🇸 @Ksidiii]

What I laid out in the original post

“6M–8M S&P deep upside calls:
Despite the rebound in equities, vol pricing for scenarios where the S&P finishes the year up ~10% is still way too cheap.”

That stuff going at a 13.5 vol when the index rallied 23% in a matter of 4 weeks still feels very cheap.

For those that are not volatility centric, you don’t need those to go ITM to make money. If for whatever reason we go to ATHs, those will reprice very nicely.

I think it’s pretty silly the market continues to be so strong, but nobody gives a shit, you gotta trade what’s in front of you. If flow wants higher, then so be it.

[Financial Times @FT]

Fed ‘absolutely’ ready to help stabilise market if needed https://t.co/peOY98VaBZ

[zerohedge @zerohedge]

because if bonds imploding, market expecting either Trump Put or Fed to step in and bail it out and frontrunning it

[Rich Dvorak @alphaking112358]

👀

[Rich Dvorak @alphaking112358]

Treasuries couldn’t keep a bid despite several positive developments like:

—Strong auctions
—SOFR swap spread retracement
—10yr rejecting 4.50%
—Cold inflation data

Alas, I threw in the towel on $TLT today and am sitting heavy cash waiting for the Fed to bend the knee to bonds.

[Rich Dvorak @alphaking112358]

I think more pain lies ahead before Powell is forced to capitulate, and once the FOMC is inevitably strong-armed into flooding the market with liquidity, stocks outperform bonds.

[Rich Dvorak @alphaking112358]

@TheStalwart @chamath Zoom out, Joe.

[Rich Dvorak @alphaking112358]

T-minus how many days until Powell blinks and the Fed embarks on its next bond buying stint? $TLT $TNX #Treasuries

[Ed Bradford @Fullcarry]

Swap spread getting crushed again after the 3y auction which suggests to me it will be harder to fund our budget deficit going forward since we'll be relying on domestic funding which will require/demand higher rates

[Kris Sidial🇺🇸 @Ksidiii]

Whenever someone tells you “markets are efficient” just remember this announcement was telegraphed a month in advance and this was the vol surface a few days ago.

Silly stuff.

[Alf @MacroAlf]

Credit spreads telling you what you need to know?

[Kris Sidial🇺🇸 @Ksidiii]

Amazing how silly Vol markets can be at times.

[Rich Dvorak @alphaking112358]

Taper slowdown hinted at in the January FOMC meeting minutes confirmed today; pace reduced by $20 billion/month beginning in April. $TLT 🎯😉

[Rich Dvorak @alphaking112358]

Anyone else getting the sense of a taper tantrum? QE5 coming soon…

[Rich Dvorak @alphaking112358]

So much for a “soft landing” ….. 😵‍💫😅

[Rich Dvorak @alphaking112358]

And so the slow march begins 😉

Got bonds?

$TLT

[zerohedge @zerohedge]

FOMC Minutes: "Reserves might decline quickly upon resolution of the debt limit and, at the current pace of balance sheet runoff, might potentially reach levels below those viewed by the Committee as appropriate."

[Rich Dvorak @alphaking112358]

UMich Consumer Sentiment is no longer a reliable barometer of the economy. Rendered into useless garbage now thanks to political bias. Markets realize this too. Just look at the muted reactions by stocks and bonds to the abysmal print released this morning.

[zerohedge @zerohedge]

According to Democrats, this is the apocalypse, folks.
No really, Democrat expectations for the economy have NEVER been lower, including the global financial crisis and covid. For Democrats, this is the 10th circle of hell.

[The Kobeissi Letter @KobeissiLetter]

It's very clear what's happening:

President Trump now believes "short term pain" is his ONLY option to lower inflation and refinance $9+ trillion of US debt.

We have seen over -$5 TRILLION erased from US stocks with the goal of LOWERING rates.

Will it work?

(a thread)

[Rich Dvorak @alphaking112358]

@paul85177 Did you miss the FOMC minutes?

[Rich Dvorak @alphaking112358]

And so the slow march begins 😉

Got bonds?

$TLT

[Rich Dvorak @alphaking112358]

For context, and a friendly reminder, the US Federal Reserve was buying $80 billion of Treasuries *per month* during their last stint of quantitative easing. Who’s to say the FOMC won’t step in and absorb this potential supply shock to curb financial market dysfunction? $TLT

[TrendSpider @TrendSpider]

BREAKING:

Canada moves to sell U.S. Treasury bonds in tariff retaliation, size undisclosed.

Canada currently holds $328 billion in U.S. bonds. $TLT

[Rich Dvorak @alphaking112358]

@RpsAgainstTrump Piss-poor reporting and media fear-mongering

https://t.co/9t6cCU70wf

[Rich Dvorak @alphaking112358]

@CVecchioFX For the garbage mail no one wants? Sounds like a good thing. I researched this in less than 10 minutes over a steak and a beer.

[Rich Dvorak @alphaking112358]

$TLT

[Rich Dvorak @alphaking112358]

…and you’re short Treasuries?

$TLT #Bonds #DOGE #Tariffs

[Elon Musk @elonmusk]

Balanced budget is going to happen