Black Swan - Risk Parity Event

Idea for Bonds:
- US05Y and US02Y printed immense spikes in the pre-market. Glitch? Probably not. Bond market in general is having extreme events globally, US markets not immune.
- Not shown on TV, but HYG also printed -7% in the AH on Friday... and traded there for several minutes.
- Dollar is unstoppable with global shortage. Pension funds have elected to use leverage to meet a 5.5 trillion dollar liability gap. I'm betting they will not succeed.

In the context of everything, more likely it is a dark pool trade and people are running for the exits.

GLHF
- DPT

评论:

Won't give away everything, but all that I said back in May-September is now taking place.

Key points:

Pension funds' strategy is to buy high yield bonds on leverage... yet HY OAS and yields are rising, even with Fed and ECB refusing to budge on 0 rates. Dollar shortage is going to trigger mass insolvencies on the zombie companies. They are screwed. Record margin and debt and pensions are going to be rugpulled. 95 P/C ratio on credit ETFs, with record delta on positioning on USTs. Big boys are putting the downside bets on credit, instead of equities directly.

Oil backwardation is going to drop oil prices, and CPI print of Dec and QoQ of Jan will be low. "Inflation" headfake.

QE and Fed Chair gets alot of media attention, but its actually irrelevant. TGA set to drain liquidity by EOY greater than the amount of QE remaining (regardless of taper timeline or not).

I was searching for a reason how my volatility indicators could have been giving a false signal, like Q2 2020, but that was when the inflows of the Central Banks' massive Balance Sheet Expansion would have a positive effect on the markets. Q4 2021 is the complete opposite.

Like before every big drawdown, losing breadth across all risk sectors, while the S&P index is unaware until the end. What is really interesting here is breadth is conversely being gained across all havens, being driven up by the dollar demand. Writing is on the wall.

GLHF

评论:

Very speculative, but dates for big events are Nov. 30, 2021, Dec 3 & 4, 2021.