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Fist pounding table very hard
Process
Start out with macro
Use Daily and 4 Hour to determine tone
Operate against 30/60 minute charts with strength of tone in mind.
Never trade against macro
Never trade against charts
When they both line up - make your living.
Leads me to believe that someone is entering a position (recession crash) vs exiting a position
Will give the exit argument this - all have been profitable trades, and/or if top of the house at a pod shop doing it, they are not panicking, just conducting business in a smart way
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What if Bessent buying the long end is akin to Congress increasing the debt?
Congress spends
Can pay for it with taxes or 30 year debt (approaches taxation).
Balance remains unfunded duration risk
Does buying 30 year debt start to look just like new unfunded spend?
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Using an AI agent is absolutely critical
Start by asking it to fetch data (do your browsing)
Then tests its ability to put the data to use
Still need to check the initial runs, but once you get past that, incredible time saver - allows you to process far more info
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So long as public debt increases, so too will private savings.
This will happen without regard to how expensive the public debt is to finance
There are only 3 ways to stop this:
1) Stop increasing the debt
2) Tax to reduce the debt
3) Finance the duration risk of the debt
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“The importance of finding real diversifying assets is critical.”
If there's one chart that frames the challenges to risk management right now, I think it's this one.
Going back 15 years, here's the rolling 6m realized correlation between the $SPX and $TLT as well as the correlation among stocks in the SPX.
In the "risk on/risk off" era, stocks and bonds were vastly negatively correlated. No longer. The latest reading is a positive 46%.
In that same era, stocks were consistently and meaningfully correlated to each other, reaching as high as 80% in crisis periods like the GFC, 2011 Sovereign Crisis and the Covid unwind. That's a thing of the past as well. The latest reading is 5%.
Stock to Bond: 100th percentile
Stock to Stock: 0th percentile
The correlation among risky assets is considerably lower than the correlation between risky and risk-free assets.
Many nominally different assets - utilities and tech stocks, for example - are not correlated today, but are linked to a common factor that could drive correlation in the future. As the bond market is as much a threat to the stock market as it is a flight to safety asset, the importance of finding real diversifying assets is critical.
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No surprise at all
Sounds eerily similar to……..tobacco companies
nytimes.com/2026/09/19/busin…
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Please read the Substack link in the following post and stop reading the ridiculous public press headlines.
Straight forward, simple language.
A rant on the shiniest object "The Basis trade of doom" in my blog post in comments. Everything people are telling you about the basis trade is wrong.
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Fun stuff
The option arbitrage stuff via yesterday's poll,
@DeepDishEnjoyer dividend, and the silver early exercise post has spawned a bunch of chats on TL & DMs. Seems to be a lot of people screwing with options but missing fundamental education.
Another first-principles type example:
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Risk assets
Is Fed policy tight now?
H No
But risk assets were priced for irresponsibility
12-0 rejects that hypothesis
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Nominal long end rates up, real rates up, dollar up
That is not a sign of policy error today, that is the market buying into the fact that there is an inflation problem, and that The Fed is willing to deal with it.
@tomkeene
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Ok. We will have press conferences.
But, they will no longer be 45 minutes. And certainly not an hour.
In fairness, less opportunity for error.
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Maybe it’s just me - but is this a body double?
First and foremost, different tone and disposition.
But one day, but positive turn
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We learned far more about this Fed as a result of the unanimous vote as we did about the actual policy choice
Think about it in terms of
1) Implied volatility
2) Term premium
Inflation as it relates to real economic growth is bad b/c of uncertainty more so than any other reason
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Good time for a reminder - things will be volatile as people rotate out of old positions, others into new positions on this paradigm shift.
Take advantage of the volatility, but only enter risk from the side of macro you believe in here.
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Let’s say oil comes off hard in the next few months, and we see that it was in fact the only source of price pressure.
Policy error hiking today? Maybe
But, in the short term will be more than offset from the supply shock easing directly related to the falling oil price.
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Let me translate for you
Hawkish hold = They fold
At which point the market would be free to sell as much duration as their financial backers would permit under their delegation of authority.
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Or
Contemplate how the math works
Former is a weighted average
Latter is a simple average
Watch what they do not what they say…
US retail sales rose by the most in five months in a broad advance, showing consumers continued to spend despite rising gas prices.
Vs
Americans' confidence in the economy declined again this month as the ongoing conflict in Iran continued to push U.S. gasoline prices above $4 per gallon.
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