1/x βnever short a dull market...β is a tried & true Wall Street adage, and risk premia decay and the charm that accompanies it is the primary driver of the phenomenon. The last few days, along w/ the next few to come are a glimpse of this wild creature in its natural habitat...
2/x Charm is like a tree sloth π¦₯. Charming & consistent but w/out the sex appeal & superhuman force of our WofF host, Vanna or our 10k lb π¦, Gary. That said, if heβs anything, heβs predictable, particularly much like Vanna, when Gary is well fed his πβs... w/ the long weekend
3/x approaching & OpEx & Vixperation soon after, this is the time for our lazy low metabolism friend to shine. He is nocturnal & particularly active @ the EODβs, from 2pm until 9am CST, as his theta clock accelerates during these windows. Tune in for our live NOVA special on π¦₯!
1/x 1 thing we donβt talk about much is Vannaβs Charming propensity to inflate & support the Neilson ratings (Valuations) to unimaginable heights. So many just tune in for the wheel of Fortune b/c sheβs on, elegantly turning those lettersβ¦Not b/c the actual W of Fortune gameshow
2/x is necessarily deserving of those kind of ratings. This becomes very apparent the longer she is around, the more euphoric the producers become about their show, completely oblivious to how essential she is to the longevity of their astronomic ratings. But when she is away, it
3/x becomes abundantly clear that the game show is no Wheel of Fortune without her⦠Luckily, she is not only around this week, but well rested & relaxed. Gary is well fed again (through Feb12) & will make sure none of the other animals break out of their cages & are in anyway a
1/x & WEβRE DONE. Just like that the π£astic comparisons to LTCM & Lehman are over, as we predicted.Thus is the power of VANNA. & Now that sheβs Charmed all theπ¦π¦ π¦back into their cages & Garyπ¦βs once again well fed, itβs π° for Vanna & Gary to team up for everyoneβs favorite
2/x game show: The Wheel of Fortune. Itβs a predictable show, w/ Gary around, but the charming daily payouts (of VRP) & bonus round winnings (market returns) make it worth the price of admission. Through 2/16 Gary should be able to keep the show under control w/his eyes closed,
3/x As Vanna has provided him an all you can eat portion of π π until 2/12, & w/ Vanna around the ratings (SPX) should climb to new highs. That said, Gary should get his rest while he can. Vanna has another vacation planned after Presidentβs day & Vixperation, & given the still
1/xGary barely held on for Vanna. The animals are still out of their cages. But Vanna is back & refreshed, & she is 1by1 using her Charm to coax them back into their cages. Gary already seems more relaxed here overnight, after a stressful couple of days where he wasnβt fed by the
2/x zoo keepers, & seemed more like King Kong lashing to & fro. While Vanna was gone, the de-grossing process driven by the retail call short squeeze mob took an overbought market, in a window of weakness that we have called for some time and managed to drop it over 5%. This has
3/x been much needed drop coming on the tail of a 20% market sprint since Sep. But at over a 7 sigma move the de-grossing action may have reached its ultimate terminus point at the logical investor reporting date of 1/29 EOM. Pair that potential selling exhaustion w/positive BOM
4/x keepers are calling in the Fed(s) (Fed/sec) for some help getting the animals back under control, so they can feed Gary & get the zoo back under control. As they are likely giving guidance to the brokers to get this under control, as every major retail broker seems to be
5/x restricting trading in the short squeeze names to closing only. The Wheel of Fortune has a taping on Fri & w/out Gary at his best the show will be overrun by the animals. If they can make it to the EOM & keep Gary above the 20 day, calm him down & start feeding him,vanna will
6/x be back & should be able to nurse him back to his usual self & save the show. But thereβs a lot of time between now & then & holding the animals @ bay until then seems like a colossal task. Given the pop in Ivols & backwardation of the curve, when vanna gets back she will be
1/x Itβs do or die time... the animals have broken out of their cages & are breaking things, & the zoo keepers are on the run. They have broken Gary out. What the animals donβt realize though is that in scaring the zoo keepers away they may no longer have any food to eat... That
2/x & oh yeah, you donβt want to see Gary hangry. Certain HF have been forced into rolling liquidations to meet margin & de-lever for redemptions/degrossing. The Q? is, is the deleveraging over yet or is it just beginning? Not surprisingly as that Q? Hangs in the air, we ended
3/x the day @ our long discussed critical point in SPX of the 1 std dev down of the 20 days. As Iβve mentioned in the past, a SUSTAINED break (2 day close) below this level could cause other systematic strats to sell off & w/ Gary on the verge of morphing into Kong, the zoo