Lord Fed's Gazette

Lord Fed's Gazette

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The Week Ahead
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The Week Ahead

Volume 54 - Still Stuck in the Mud

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Lord Fed
May 15, 2023
∙ Paid
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It is always the simple that produces the marvellous.

- Amelia Edith Huddleston Barr

Good Morning America,

A fun fact from SocGen to start the day “The AI boom and hype is strong. So strong that without the AI-popular stocks, S&P 500 would be down 2% this year. Not +8%”.

Another solid week for premium harvesters; I sold ATM SPX straddles every day last week, bar Friday. TWLO bear calls and PYPL puts played out nicely for myself and paid subscribers. Very pleased with the performance of my joint largest weighting GOOGL 0.00%↑ last week, Google IO was interesting, and I think a few ChatGPT fanatics have had their heads swayed…

CTA flows are annoying most as usual… asymmetry skewed to the downside, but nothing. While CTAs are a tiny community, it always amazes me that when they are in buy mode, bears claim the flow projections are pointless (as the CTA community is so small)… but sell mode? CTAs are a bear’s best friend all of a sudden. CFTC data has specs at a close to a record short position on S&P futures… I am still ignoring treasury positioning, as basis trades are most likely on the rise. It’s been over two months since stocks had a meaningful selloff despite the (regional) banking crisis…

Some action (ish) in FX at long last, but vol remains well suppressed across asset classes. CPI and PPI showed that inflation is still heading lower…

The frustration continues…


The Usuals…

My S&P spot levels…
The week in a nutshell…

Like QQQ 06/30 310/290 bear puts trading for 2.47 as some downside protection… I also like EuroStoxx 3400/3700/4000 put fly (now 6.5).

After covering my USD/CAD short from 1.3800 at mid 1.33s, I want to re-enter the short at half the prior size at 1.36.

This morning I opened a short position on EUR/GBP at 0.87 with a 0.86 target and 0.88 stop. I will talk a little more about this later on in the post.

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