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The September Pullback One Vol Trader Sees Coming

NowPress play to follow along0:00 / 26:22
Chapters14 segments · tap to seek
ticker lesson

Breakdown

0:00lesson

Political dynamics and market signaling

  • Treasury Secretary threatening market
  • Political odds align with oil and interest rates
  • Midterms are key for market direction
  • Markets bigger than Fed or Treasury
1:54lesson

QE and crisis management

  • QE during COVID pales in comparison to market moves
  • Market is signaling mechanism
  • Fed and Treasury need crisis to act
  • Political nightmare to act proactively
3:45lesson

Fed's role in crisis

  • Fed can print unlimited dollars
  • Need crisis to roll out real measures
  • Market front running potential crisis
  • Oil prices and Hormuz critical
5:30lesson

Market behavior and policy bias

  • Market not listening to Treasury
  • Policy bias is doubbish
  • Break evens rising due to long-end movement
  • Gold and silver not falling
7:36lesson

Fed rate hikes and CPI

  • Fed rate hikes still odds going up
  • Market not fighting Bessent
  • CPI print on Friday critical
  • Fed credibility on line
9:28lesson

Market control and tools

  • Fed has tools to control markets
  • BLS commissioner fired
  • Fed meeting could be supportive
  • Market needs to turn
11:17lesson

Inflation and market strategy

  • Inflation needed structurally
  • Bessent holding down long end
  • Inflation trending higher post-midterms
  • Market trying to avoid crisis
13:01lesson

Market decline and reversal

  • Market decline until SEP opex
  • Jackson Hole meeting to talk discipline
  • Need more vault expansion
  • Market could reverse in next 5% down
14:46lesson

Political deadlock and crisis

  • Deadlock in Congress
  • Policy response needed in crisis
  • Historical example of 2008
  • Fear of no coherent response
17:00lesson

Treasury crisis and normalization

  • Preparing for Treasury crisis
  • Normalization of buying stocks
  • Sovereign wealth fund plan
  • Need crisis to roll out measures
18:47lesson

Sovereign wealth fund and OpenAI

  • Government stake in OpenAI
  • Redistribution to public
  • Norwegian sovereign wealth fund example
  • Populist framing of investments
20:31lesson

Equity market and debt monetization

  • Equity market too big to fail
  • Monetizing debt through inflation
  • Strategic investments in businesses
  • Populist framing of ownership
22:21lesson

Market sentiment and inflation

  • Market paying little attention to probabilities
  • Focusing on Fed tone and messaging
  • Inflation report as determining factor
  • Event risk moving out of the way
24:13lesson

Fed's response and market expectations

  • Fed not hiking rates
  • Supply side problem not solved by rate hikes
  • Inflation report could surprise
  • Potential for market reversal

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