4/9/25 Live Trading Room Market Recap & Trades
»CLUB/EDGE client post at 1:15 pm ET
BESSENT IS TRYING TO SWEET-TALK US
THIS BESSENT POST TIMED PERFECTLY WITH THE 1PM AUCTION!
Also, the auction was fine/good.
There are no coincidences with markets. Just sayin'.
So wouldn't be surprised if bonds get supported here.
Wouldn't be surprised if we see relief rally in $KRE $XLF as #10Y digests 4.36-4.5.
He is trying to slow the selling of equities too.
As bearish as I am big picture, doesn't mean I don't appreciate INTERVENTION when I see it - even if it is ALL TALK. ;-)
It will make bears think about pressing and sometimes that's all you need for a wee rip back up into my SPX 5264 wkly resistance! Above is bullish, break back below is not!
BULLISH VIX DIVERGENCE?
Last but not least... here are some observations on volatility structure today. I'm sure Hans will have great insights when we meet at 4PM for Macro-to-Micro Options Power Hour, but for now wanted to get these posted as placeholder.
VXN is breaking out strongly ... look at the differential between VXN & VIX: one is very green, the other red. It could be a short-term bullish divergence.
Higher:
VXN +28%
VVIX +9%
GVZ +12%
VXEEM +12%
OVX +10%
VXGS +3% after doubling past wk and more than 1/2 to COVID high of 130
VXAZN also doubled past wk + at 70 on way to 77.50 COVID high
Lower:
VIX9D -4.7%
VIX (30D) -4.5%
VIX3M - 1.4%
So my take is *they* are not pricing so much more volatility in 9D (after House vote & April OpEx?) let alone 30D (tax cuts signed?) out or 3M ...
But right now the curve is still in DEEP BACKWARDATION and that is enough for me to warn: stay away big picture.
Even SVXY -.3% is now back to levels from Feb 2023 when SPX was 4200 before NOV 1 2023 "Fed Pause & Yellen Yahtzee" when SPX was 4300.
So that's where we go next in my opinion big picture.
But the bond support with VIX softening could be a tell for some relief.
Just keep in mind: RPAR is broken with bonds, munis, equities ... as we head into JOBLESS CLAIMS THURSDAY MORNING & potential House vote this weekend - which could go either way!
Translation: We are not out of the woods.
We need good news & this is the closest we've got right now:
Bessent trying to calm the most important market in the word: US Treasuries!!