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VIX Traders Are Piling Into Bets That Fresh Stock Pain Is Ahead

https://youtu.be/t7R44Q7qa10

Volatility traders are putting their guard up just as US stocks bounce back, with options signaling the highest level of anxiety since right before the 2020 pandemic crash. The call-put ratio on the Cboe Volatility Index, or VIX, jumped Wednesday to levels unseen for some two and a half years, driven by bets on fresh market turmoil. Options hedging is showing signs of revival after staying subdued during the recent equity selloff. The rush for protection reflects investor uneasiness in the face of the S&P 500’s longest streak of gains in three months.  With a cost measure of VIX options hovering near the lowest level since 2019, traders are likely taking advantage of what looks like cheap insurance against the next bout of market chaos. The hedging activity stands out given the fact that the VIX, known as Wall Street’s fear gauge, failed to hit new highs since March even as the S&P 500 careened to fresh lows.  “VIX hedging hasn’t worked like you’d expect,” said Danny Kirsch, head of options at Piper Sandler & Co. “Implied volatility moves have been muted all year. It’s been a terrible hedge so far.”

Traders turn to VIX options for hedge, pushing call-put ratio to highest since 2020

Before this month, there were signs that professional investors were shunning equity options and instead flocking to stock futures to hedge positions. Now, demand for options appears to be back. More than 440,000 VIX calls changed hands Wednesday, outpacing puts by a margin of 5.8-to-1. That’s the highest reading since January 2020. The VIX fell for a second day, slipping to 25.91 as of 10:43 a.m. in New York, poised for a one-month low. Stocks advanced for a fourth day amid optimism over China’s $220 billion stimulus plan. Despite the bounce, the S&P 500 is down about 18% this year as investors reassess equity valuations in light of the Federal Reserve’s aggressive plan to tighten monetary policy. NN: I see this little drug party they are throwing in stocks ending in a great big drug bust. So what is a lucky guesser to do but short the shit out of it and hoping the lottery tickets pay off.

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Bonds mired in extreme bearishness – BoFA

LONDON, July 8 (Reuters) – Investors sought shelter in cash and U.S. Treasuries and dumped gold and equities as markets braced for a bumpy ride as central banks raise rates aggressively in the face of slowing economic growth, BoFA Securities said in a weekly note on Friday. Investors squirreled $62.6 billion into cash and $2.4 billion into bonds, BoFA said citing EPFR data. The week ending July 6 marked the biggest inflow into U.S. Treasuries in eight weeks, while emerging market equities saw the biggest outflow in eight weeks. “The simple truth remains that the second half is most likely to be one of slowing growth and rising rates,” BofA analysts said led by Michael Hartnett.

“Bear markets end with a recession or an event that causes Fed to reverse policy.. bear markets aren’t over and the Big Low has yet to be reached.”

A market indicator measuring how investors are positioned held at “extremely bearish” levels for a fourth consecutive week. Outflows from European equity funds extended into its 21st week, while emerging market debt has now seen outflows for the past 13 weeks. In other notable highlights, a U.S. Treasury bond market volatility gauge held above 150 for only the 11th time in the past 35 years, levels coinciding with recessions or default. NN: we are trading this by shorting the most recent bear market rally. In the future we will take advantage of the FED overtighting by raising rates to high. I would like to catch this move by legging into our beloved Zeroes.

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US surges at close, Dow up almost 350 points

Major stock indexes in the United States rallied at close on Thursday, as S&P 500 ended the trading session higher for the fourth consecutive day, making this its longest winning streak since March 2022. Federal Reserve Bank of St. Louis President James Bullard noted that the country’s economy will be expanding during this year despite rate hikes, while Fed’s Board of Governors member Christopher Waller shared that he would back a 75-basis point hike in July. On the data front, the Department of Labor revealed the number of initial jobless claims in the US rose by 4,000. Meanwhile, the country’s trade deficit decreased to $85.5 billion in May. The Dow Jones jumped 1.12% or 346 points at the closing bell, as Caterpillar surged 4.63%. At the same time, S&P 500 gained 1.50%, with ON Semiconductor shooting up 9.24%. The Nasdaq 100 soared 2.16% at the close, with Lucid skyrocketing 8.92%. The euro lost 0.18% against the dollar at 3:59 pm ET, selling for 1.01648. NN: We saw this bounce coming and traded it up. It help our trading a lot. We then started shorting and hopefully that is the correct move. 2nd quarter earnings season will soon start and i expect MAJOR DOWNWARD revisions in forward earning guidance. That should be a nice reality check for diehard market bulls. I also believe that the FED is stuck in tighting mode. They are a year to late in getting into raising rates. And as is usual with those pompous doctoria pricks they will overtighten, Which means we have 2 years of FED FUCKUP fun in front of us….

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U.S. OIL and Gasoline Prices Are Falling

U.S. gasoline prices are starting to slide, AAA data showed on Wednesday. The average price of a gallon of gasoline in the United States has fallen to $4.779, AAA data shows—a decrease of nearly 9 cents per gallon on the month.According to Gas Buddy’s Patrick De Haan, the downward trend could continue in the coming days and weeks, with “thousands of stations falling back under $4 per gallon,” De Haan said in a Wednesday tweet. The states that should see the most relief at less than $4 per gallon are South Carolina, Georgia, Mississippi, Louisiana, Arkansas, Texas, Alabama, Tennessee, and North Carolina, he said. Gasoline prices continue to be worrisome for the Biden Administration, whose party faces critical mid-term elections this fall. In a recent ABC News/Ipsos poll, 74% of Americans reported that gas prices are an important factor in how they will vote in the fall. It will be the first midterm to contend with a gasoline price hike of this magnitude. The Biden Administration has released 146 million barrels of crude oil from the nation’s stockpiles since taking office in order to curb high prices at the pump for American drivers, but gasoline prices are still up $1.645 per gallon from a year ago, AAA data shows, when gasoline prices were just $3.134 per gallon. U.S. refineries are running near-maximum capacity at 95%, and some of the barrels being released from the SPR are now heading overseas. The price of WTI has fallen by more than $13 in the last week, while Saudi Arabia announced crude oil price hikes for August for its prized market, Asia. NN: We are seeing demand destruction. But behind the seams the EU and US are letting Russia sneak barrels into the market. Theu really have no choice.

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Russian military advances towards Sloviansk – Ukraine……. Lavrov arrives in Bali for G20 FM summit

Russian troops bombarded several Ukrainian towns on their way to the city of Sloviansk, the Ukrainian military said on Thursday. According to the Ukrainian military, the Russian forces are being held back, however, the pressure is increasing, as the Russians continue to advance toward both Sloviansk and Bakhmut. Lugansk governor Serhiy Gaidai stated that the province is not entirely occupied by Russia, which, according to him, has suffered ”colossal losses.”

Lavrov arrives in Bali for G20 FM summit

Russian Foreign Minister Sergey Lavrov arrived in Bali, Indonesia, to attend the G20 foreign ministers summit. The Russian Foreign Ministry announced that Lavrov will hold meetings with his Turkish and Chinese counterparts, Mevlut Cavusoglu and Wang Yi, during the event. On the other hand, United States Secretary of State Antony Blinken and German Foreign Minister Annalena Baerbock have said they will not meet with Lavrov amid Moscow’s war in Ukraine. NN: They are jerking us off. Reality is Russia is making great advances in its plan to gobble up the parts of the Ukraine worth having. NATO has been shown for the sick joke it is.

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Lavrov: Ukraine conflict to go on until Russia achieves goals

Russian Foreign Minister Sergey Lavrov said on Wednesday that Moscow intends to continue its military operation in Ukraine until it achieves its objectives. Speaking at a press conference in Hanoi after a meeting with his Vietnamese counterpart Bui Thanh Son, Lavrov accused the Western media of reporting one-sidedly about the war in Ukraine and failing to provide “objective information” about the “Ukrainian regime.” He added that the West should be aware of its “responsibility” for the deaths of civilians in Ukraine, particularly those in Donbass, as the weapons they provided to Kiev are used “against the civilian population as a means of deterrence, by and large, this is state terror.”The Russian top diplomat also denied Ukraine’s allegations that Russia attacked its own cities in order to blame it on Kiev. NN: any way shape id,  bend it or twist it… Russia challenged the world and is winning big time. And the failure of the democracies to engage Putin has been duly noted by the enemies of freedom from dictators to drug lords.

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Ray Dalio warns Russia may be ‘lesser loser’ in Ukraine war

Ray Dalio has hit out at political extremes in the U.S. that don’t respect a rules-based system, and warned that Russia is likely to be the “lesser loser” from the Ukraine war as the economic cost to the West causes NATO support to fracture. The founder of Bridgewater Associates, the world’s largest hedge fund with about $150 billion under management, took to Linkedin on the U.S. Independence Day holiday to deliver an update on the forces he believes are shaping the world. And he’s not happy with how things are going in the U.S. “The remarkable leaders who designed the governance system [after the 1776 declaration of independence] and laid it out in the Constitution created both a principled and practical approach that thus far has lasted for nearly 250 years,” Dalio wrote. But now, some of the essential elements required for representative democracies to work well are being called into question, he noted, such as abiding by election votes and rulings of the Supreme Court. “With increasing conflict between populists of the right and populists of the left, growing numbers of people are inclined to fight for what they want and what they believe is right rather that work themselves through the rules-based system of consensus and compromise that our Founding Fathers designed.” Meanwhile, the world order is not changing for the better, implied Dalio, if the conflict in Ukraine is a guide.If Russian President Vladimir Putin ends up controlling the eastern part of Ukraine and manages to remain on the world stage then Russia would be a “lesser loser,” Dalio reckoned. “Because the devastation in Ukraine has been so much greater than it has been in Russia, and because this will be economically costly to Ukraine and/or those countries that will pay to have it rebuilt, the war looks like it will be even more costly to NATO countries, so that also will be relative win for Russia,” he added. In summary he said: “It appears that few countries are lining up strongly against Russia and behind NATO countries, and it appears that support within NATO countries for war is weakening due to its relatively high costs.” NN: NATO spins the shit that the heroic Ukrainians are winning. In reality they are getting their asses kick end. The EU and the US are spinning that sanctions are bringing Russia to its knees. In reality the Ruble is soaring in value and Russia is getting the heighest prices ever for its exports and demand is greater then ever. On the other hand the worlds democratic economies are seeing run away inflation. Energy prices are the highest ever and the Pound and Euro are collapsing on the world currency markets… Looks to me like Putin the evil emperor is winning. He now controls all of Ukraine bordering Russia and the black sea…. And NATO has proven once again it is afraid of a fight…..

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Dow Jones pares loses as Nasdaq soars over 1.6%

Markets on Wall Street saw a turbulent session on Tuesday, with the Dow Jones shrinking losses and the Nasdaq 100 and the S&P 500 turning positive near the end of the trading day. Investors were also preparing for the release of the highlights of the last meeting of the Federal Open Market Committee, which is set to be published tomorrow. Meanwhile, news surrounding the British government and the major sell-off of crude oil prices marked the day so far. The Dow Jones declined 0.42% or 129 points at the closing bell. On the other hand, the Nasdaq 100 soared by 1.68% or 194 points, and the S&P 500 increased by 0.16%. The euro tumbled 1.50% against the greenback to sell for 1.02664 at 3:59 pm ET. NN: My bet is their is a significant bear market rally back comming… And today it started…… Odds are i am wrong and we will lose our ass.

 

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Oil prices plunge, WTI drops below $100 per barrel

Oil futures prices continued to tumble, with West Texas Intermediate (WTI) falling below $100 per barrel for the first time since May 11. Fears of a recession appear to indicate that demand for fossil fuels may be reduced further, while the European Union urged an agreement on the Joint Comprehensive Plan of Action (JCPOA) is reached soon. West Texas Intermediate (WTI) for settlements in August dropped by 10% at 11:40 am ET, to sell for $99.62 per barrel. A minute later, Brent for September settlements plummeted by 9.38% to go for $102.92 per barrel. NN: commodity prices are tumbling across the board. This will trigger a relief rally in stocks… Trickiest market i have ever seen. thats ok i do trickey

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Saudis Unwilling To Upset Putin As Biden Begs For More Crude

  • The United States is calling on Saudi Arabia to increase oil production.
  • Saudi Arabia has maintained its OPEC+ output agreement, refusing to ramp up production.
  • The Kingdom is still maintaining close ties with Russia despite its continued aggression in Ukraine.

The world’s largest crude oil exporter, Saudi Arabia, continues to keep close ties with Russia while the top oil consumer, the United States, pleads with major producers—including the Kingdom—to boost supply to the market and help ease consumers’ pain at the pump.  While the U.S. and its Western allies are sanctioning Moscow and banning oil imports from Russia, U.S. President Joe Biden is also turning to Saudi Arabia to ask it to pump more oil as Americans pay on average $5 a gallon for gasoline.   The Saudis prefer to keep close ties with Russia in oil policy as the OPEC+ pact and the control over a large portion of global oil supply has benefited both OPEC+ leaders—the Kingdom and Russia—over the past half a decade. Saudi Arabia, however, could use a little thaw in Saudi-U.S. relations under President Biden, who is no longer talking about the world’s top crude exporter as a “pariah” state.  The Saudis are carefully maneuvering to keep Russia as an ally in the OPEC+ group and possibly improve relations with the United States.  President Biden—desperate to see relief for American drivers ahead of the midterm elections—has made a U-turn on Saudi Arabia and is expected this month to visit the Kingdom, which he said on the campaign trail would be treated as a “pariah” state during his presidency. But U.S. gasoline prices at $5 a gallon and the loss of part of the Russian supply have made President Biden reconsider and meet with Crown Prince Mohammed bin Salman. Saudi Arabia has publicly reiterated its “warm” ties with Russia on several occasions since Putin invaded Ukraine, and considers keeping Russia in the OPEC+ alliance an important part of its oil policy. With Russia leading a dozen non-OPEC producers in the pact, Saudi Arabia has more sway over global oil markets with the larger OPEC+ group than with OPEC alone. Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman have discussed their countries’ cooperation in the OPEC+ oil production pact in a few telephone conversations since February, and have vowed to continue their cooperation.  Last month, Russian Deputy Prime Minister Alexander Novak said that Russia could continue its participation in the OPEC+ agreement even after it officially expires at the end of this year. Novak was speaking after a meeting in St Petersburg with Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, who made a surprise appearance at a Russian economic forum.  During that meeting, the Saudi minister said that Saudi-Russian relations were “as warm as the weather in Riyadh.”  Two weeks before that meeting, Russia’s Foreign Minister Sergey Lavrov visited Riyadh and met with his Saudi counterpart Prince Faisal bin Farhan Al Saud. The two ministers said that the OPEC+ alliance is solid, with the level of cooperation within it strong. The recent OPEC+ decision to accelerate the production increase and roll back all cuts in August, a month earlier than initially planned, was pushed by Saudi Arabia amid U.S. pressure. But the Kingdom had to check with Russia first before proposing the redistribution of the September increase in July and August, sources with knowledge of the behind-the-scenes diplomacy told Reuters this week.  Both the Saudis and Russia benefit from the OPEC+ deal, so Riyadh wants to keep Russia on board, the sources say.  “The Saudis are enjoying high prices while the Russians need guaranteed support from OPEC+ in the current circumstances,” a source familiar with Russian thinking told Reuters.  “No one is interested in a market collapse,” added the source.  After the production cuts are completely rolled back next month, a more difficult decision for OPEC+ looms: what to do next as Russia is more than 1 million bpd behind target and could lose more supply as the EU embargo on its oil begins at the end of this year.  Neither is OPEC+ as a group anywhere close to reaching its target production, nor has Saudi Arabia much spare capacity left to boost production further, as the U.S. and other major consumers want. Per the OPEC+ deal, the Saudi target (as well as Russia’s) is at 11.004 million bpd for August. The Kingdom has rarely reached this level, and not for a sustained period of time. So, it’s not certain that the Saudis have the ability to pump 11 million bpd or more on a sustainable basis. It’s even less certain that the Kingdom can quickly tap—if it wanted to—into the 12.2 million bpd production capacity it claims it has.  NN: OPEC is in tall cotton. They are not going to change a winning play book.If the world is silly enough to create energy shortages thinking they are punishing Russia…. OPEC, the Saudis and Russia et all are more then willing to accommodate them