Monday Morning Quarterback - Weekly Raid #22
Good Morning Traders
Hope everyone had a good weekend and is ready for another week.
This weekend was interesting on a geopolitics front with the news that a Russian War Ship fired warning shots in the Black Sea. If there was ever a potential for a black swan event….I would look to that region for the catalyst.
News of the day
Nothing really big on tap this morning for news, but there are plenty of things to watch this week going forward.
Today though we just have some short dated bond auctions at 11:30. I don’t expect this to move the market any.
From a Macro Level not much has changed from last week. Watching a few different spreads between bonds.
My main spreads are the 10-5 year, 10-2 year and the 10-3month(this one being the newest addition.
Spreads are a pretty powerful way to gauge institutional and governmental risk appetited towards the US. In normal markets the longer the date on the bond, the higher the rate should be. Whenever that formula produces a negative its said to “inverted”.
This has historically led to economic issues and I have no reason to believe that “This time is different”.
Jumping into today, I am watchin JNJ on the open. There was a huge options position opened in some September Calls. And when I say huge I mean in the 6 figure range of contracts that held over in OI. These types of things usually have some form of effect on the stock itself. I am also looking to see if its part of a spread, although I can’t imagine anyone with the guts to hold a 600k lot spread for any length of time.
I am watching DIS this morning as well. We have a host of POCs below us between 85.50 and 86. This would be a great potential spread trade. A Bear Call spread would just have you trade the directionality of the move. Timing and magnitude wouldn’t factor in.
Finally watching JPM today. A run back up this week into the higher 150’s could be in play. Same thing here though, I would want to play that as a spread to keep both risk and time decay on my side.
As always trade well and be safe