The Fed wants inflation to run hot to reduce the real value of excess debt in the economy and then rein in inflation, like the proverbial holding onto the balloon rope as it floats away, when to let go.
At this present moment, talk aside, has the Fed done anything? No.
Does the Fed have any intention to do anything more meaningfull than than a 50bp hike? No.
That is always a dangerous proposition. It only takes an announcement from the Fed that they are providing unlimited liquidity to sink your shorts. I think the mode of action is to buy puts on non-profitable growth companies. By buying puts, you limit your losses. Also, by focusing on the non-profit growth companies, you are hedged for a crash and you are betting that the rising interest rates will crush their discounted cash flows. I currently have puts on CVNA, MDB, and TWLO.
The Fed wants inflation to run hot to reduce the real value of excess debt in the economy and then rein in inflation, like the proverbial holding onto the balloon rope as it floats away, when to let go.
At this present moment, talk aside, has the Fed done anything? No.
Does the Fed have any intention to do anything more meaningfull than than a 50bp hike? No.
So, when is a good time to short the S&P 500?
That is always a dangerous proposition. It only takes an announcement from the Fed that they are providing unlimited liquidity to sink your shorts. I think the mode of action is to buy puts on non-profitable growth companies. By buying puts, you limit your losses. Also, by focusing on the non-profit growth companies, you are hedged for a crash and you are betting that the rising interest rates will crush their discounted cash flows. I currently have puts on CVNA, MDB, and TWLO.
Put options on TECL!!! :)