Don't Fight the Fed - Option Sensei

Don’t Fight the Fed

Posted On April 29, 2020 2:58 pm
By: Steve Smith

The market continues to rip higher, with the “SPDR (SPY)” now up some 305 from the March low and just 10% from its all-time highs. In recent Option360 Monday Outlooks I’ve discussed the difficulty being bearish in general and especially during the current environment in which the rules, policies, and government institutions are geared towards rewarding shareholders.

First and foremost, you have 10 years of the Federal Reserve’s intervention which has not only run far and wide from the Feds supposed dual mandate but has a completely perverted monetary policy, the very nature of money and purpose of public markets in which risk/reward and responsibility are supposedly associated with participating in the buying and selling of financial assets.

It may sound simple, but it’s true; Don’t fight the Fed. And they’ve come out and said they will do everything and anything, including the direct purchase of corporate and municipal bonds and even high yield ETFs such as “SPDR Bloomberg High Yield Bond (JNK)”.

There are also… Continue reading at StockNews.com

Tagged with: Federal Reserve

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.