This newsletter is my primary sales tool…where I hang it all out there…If you think my work is worthy, please feel free to pass it along to anyone who might be interested. Thanks. Bill

December 9, 2022

 The Fed has yet to raise rates…

But the Eurodollar market is already (STILL) doing it ahead of them.

Point blank, I think the USA economy is in an outright BOOM…and with the infrastructure package about to become a gigantic stimulative force…I can only suppose that it’s about to get even hotter.

Walk out your door and note that whatever the time of day, or day of the week, the roads and shopping centers are JAMMED with consumers…And on the interstates? JAMMED with semi’s. And construction? It’s EVERYWHERE. Houses. Apartments. Buildings. You name it and there are structures going up…Around me, a half hour from downtown Atlanta, there’s construction, almost literally,  on every corner.

And one more time. The infrastructure package is about to throw all sorts of money, energy and economic activity into the mix?

Guys, if these aren’t boom times, I don’t know when it ever would be…However, I can only view headlines like the one following as evidence that there are plenty of economists and analysts still thinking that rates might be just “creeping higher,” or only going up slightly…which quite honestly, only reinforces my opinion that rates have a LONG way to go on the upside.

I think any discussion about the Fed perhaps taking some degree of a “slow go” approach to raising rates is about as absurd as it gets. Not only do I believe that the Fed is already six months behind the curve in BEGINNING to raise rates, I can also easily imagine that the economy is potentially about to explode on the upside…right in their faces…and that somewhere within the next 2-3 months, we’re going to see some surprisingly AGGRESSIVE action on the interest rate front.

As I’ve been yelling for months…THE FUTURES MARKETS LEAD THE FED…and with my view that the economy is already booming…and about to get even more so (here and everywhere else on the planet), I think that rates will likely be going up even more than I previously imagined.

And I keep saying this, but it’s quite pertinent…RATES HAVE ALREADY GONE UP IN THE FUTURES MARKETS…AND THE FED HAS YET TO MAKE THEIR FIRST MOVE?

The Consumer Price Index comes out tomorrow…It will be interesting to see what this month’s number actually is…but more interesting, I believe, to see what the reaction is in the Eurodollar market.

I CONTINUE TO RECOMMEND BUYING PUTS IN JUNE AND/OR SEPTEMBER 2022 EURODOLLARS. I THINK THE BARE MINIMUM TARGET IN BOTH IS 98.50, THEREBY REFLECTING A 1.50% LIBOR…which I still believe won’t really hit the brakes on anything.

Buying this option right now…might be different price after 8:30 AM tomorrow…

I keep saying it…I basically think nothing has really happened here yet…And with the market having provided some indication that it IS on the move, this is a great place to be putting on new positions.

Let me know if you want to do something with it…and I obviously think, the sooner the better.

Thanks,

Bill

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866-578-1001

All option prices in this newsletter include all fees and commissions. All charts, unless otherwise noted, are by Aspen Graphics and CRB.

The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars