»CLUB/EDGE client post Wednesday morning, September 17th, pre-FOMC.
Mechanical Deleveraging In View
Good morning. I didn't finish writing this last night after my big market thoughts post yesterday where I warned - Event Vol Building.
But I did review the points below LIVE so members heard my rant pre-market.
The market is pricing in almost no chance of a half point cut today. Maybe that's how it goes, but there is RISK it doesn't go as planned and I think it's wise to protect portfolios or play chase short reversion to mean trades in MAG7. Remember, "we are all bond traders now."
My Growth:Value ratio reached resistance at 2.30; a rejection will hit growth/tech/ MAG7 hardest. And this was even BEFORE China declared/warned their companies to no longer buy NVDA chips. I warned THIS was coming for months.
Friday's OpEx will see a ton of SPX gamma come off the board - AS I HAVE WARNED FOR WEEKS - with higher probabilities "setting free the bear" soon after. I post about a growing risk of a QUANT QUAKE below.
Shutdown risks for Oct 1st have only grown - especially if there is no vote or a no-vote this Friday to keep the govt open for seven weeks. This is a GDP contraction trigger so think "Growth Scare."
FX volatility started small Mon; I wrote about it/warned Tues. I see the chances of BOJ threatening rate hike sooner rather than later as "not priced in". Watching USDJPY & USDCNH fall is not equity supportive and "will seep into equity volatility."