Fixed it

May 26, 2020

–ESM at a new high for the move this morning above 3000, and just 450 away from all-time highs set in Feb.  Mini-Nasdaq is up 176 at 9582; just one more day with this magnitude gain will eclipse the high settle in Feb of 9754.25.  Everything is back to normal!  Why, the Chicago Tribune even ran a story (nearly pushing Covid off the page) with this headline: ‘By Monday morning, 9 people had been shot and killed in Chicago, making it the deadliest Memorial Day weekend since 2015’.  Ahhhh, normalcy.

–Bonds are down, but still in their two-month range.  For example WNM (June ultra bond) currently trades 220, with a triple bottom low around 217-16.  Friday was quiet with a slight bias toward flattening which has been erased this morning with front contracts -1 and blues (4th year) -4.  The wall of liquidity upon which the stocks are surfing would ordinarily spell trouble for bonds, but the Fed is still there, providing a not-too-subtle backstop. If bonds do break recent lows, then I think vol will rise with higher rates, especially given current levels.  Not sure of timing, but tempted to consider put ratios, long more of the lower strikes.  

–Gold is down $13 but silver is up $0.13, pushing gold/silver ratio to a new recent low of 99.5, lowest since March, prior to the pandemic surge to 124.  

–News today includes Chicago Fed National Activity and New Home Sales for April, expected to be down 23%.     

Posted on May 26, 2020 at 5:30 am by alexmanzara · Permalink
In: Eurodollar Options

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