🚗 Bonds Could Trigger a Squeeze This Week

[] [The daily rundown of everything happening at Option Pit.]( [.]( MARK-et Open Griff here with the Chart of the Day. Groundhog’s Day … Dollar up, Interest Rates up and pretty much everything but mega cap stocks down. However SPX was able to go green at the close and as you can see below option flow as balanced .. My conclusion is that we may see a squeeze higher this week. [ My reasoning is 10-year bond yields made a new high, which will make Janet Yellen very nervous heading into next week’s large bond supply. Yellen has $700B sitting in her Treasury General Account (TGA) piggy bank and she may want to inject extra liquidity into the bond market, which would reverse the recent trends and send stocks higher. Let's Go! [ Power Income: Janet Yellen is Loaded with Stimulus Welcome to Q4 ’23 the quarter of hope that a Santa Claus rally will unfold … Well as I was preparing for another wild week in these crazy markets I did find that ray of hope and again this year, as she has in past couple of years, Janet Yellen will be playing Santa. Janet Yellen has stuffed her sack with $700B in newly minted dollars… The question is when will she be coming town … [I’ll tackle that question today along with how to trade the market this week …]( [Here's how traders can profit by understanding delta...]( - Griff Pit Report: QSR Video Below This week during our Trade Highlight Show, we covered QSR. We each gave our thoughts on the ticker last week in this newsletter, and we held a live roundtable show this morning to come up with an actionable trade for you. Trade Recap: Buy-to-open QSR October 20th 67.5 calls for .50 with a .70 top, downside stop if QSR stock breaks 65.10, sell most options at 1.20 on a rally [Click here to watch the full show.]( [To see the live show every Monday at 10:30, just sign up for any paid service here at Option Pit](... - Mark AG's Views: Things are not a problem until they are From the desk of Option Pit Director of Education Andrew Giovinazzi I have been watching bond action for some time now and it looks like rates are starting to do something not many people thought they would. They are still going up and the Ishares Barclays 20+ year Treasury Bond ETF (Ticker: TLT) is going straight to palookaville. Everyone laughed at Bill Ackman for shorting Treasuries but he is looking smart right now. Note TLT keeps going down, which means bond yields keep going up. Part of the problem is government spending. [ Prior to the bubble in bond prices when yields were 0%, everyone thought that was ok and normal. Well it wasn’t and now the Fed has to undo the problem. One of the sharper pros in our Pro Chat Room said we could go back to pre-GFC interest rates. That is 6 or 7%. I think the issue over the weekend has been that there is no off button for the crazy deficits run by Uncle Sam lately. Congress is doing little to solve it. Like the Dot Com boom where folks paid crazy prices for internet stock for 4 years, it was not a problem until it was. The Invesco QQQ Trust (Ticker: QQQ) went sub-$20 in 2002 in the bust. How far does TLT go? This will give stocks orbiting performance in SPX and VIX. We are in a trading range and will be stuck like that until something on the US Gov spending side breaks. I will take apart the bond volatility in TLT in my OP Newsletter for tomorrow. -AG OPTION PIT GLOSSARY [( There are plenty of terms in the trading world that need defining. The [Option Pit Glossary]( is here to help. Today's phrase is: Implied volatility (IV) - The interpolated volatility (or forward volatility) of a stock or option, reflected in the option’s price. [( DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. DISCLAIMER: OPTION PIT LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. 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