February 21, 2019
As I keep repeating, I think the currently popular talking head idea that the economy is slowing, is, frankly, just dumb. As I also keep repeating, all of those same analysts, economists and “strategists” have basically been calling for a top in stocks and the economy for YEARS…and the recent end of year sell off in stocks has once again inspired them all to climb back on the same dead “it’s a fragile economy” horse…
And together with their calls for the “slowdown,” they are all now actually talking about “interest rates heading lower.” This I find equally stupid…and see it as just the same classic Wall Street out-of-touch with reality thinking that I first observed while working at Merrill Lynch over 30 years ago. All those guys in suits look good, and sound good (especially at covering their advisory tracks), but they generally ARE just dead, dead wrong…over and over and over.
If you are a long time reader…It does not mean I am right now, but you will know that I have correctly made MAJOR against-the-grain calls in interest rates, literally, for decades now…And my immediate and VERY strong opinion is that the Treasury Bond market IS about to have a BIG break to the downside…that INTEREST RATES ARE GOING SOMEWHAT SHARPLY HIGHER…FROM HERE…AND NOW…AND I STRONGLY RECOMMEND BUYING PUTS…OR SHORTING FUTURES IN JUNE, 2019 TREASURY BONDS.
What to do here…now…
I think the move down HAS STARTED…One way to go is to buy this option…and if I am wrong and June rallies back over recent 146 ½ high, sell the put and take a relatively small loss…However, if it keeps working, leave it alone and just hang on until, at least, the mid-30’s.
Call me if you want to talk…And no, you are NOT going to find comfort about taking this risk out there in the media. The analyst crowd would tell you that I don’t know what I am talking about…or doing.
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Treasury Bonds