It’ll be interesting to see whether the markets take a new direction — down would be my guess — after Labor Day. For speculators, the summer has been the most boring anyone can recall, alleviated only by some meaningless spasms caused by Yellendrivel, phony economic statistics and speeches by various Fed stooges. Most of the time, they were trying to sound threatening with warnings that the Fed would tighten ‘soon’. In reality, as everyone should recognize by now, if monetary policy is about to change, loosening is far more likely. This will happen all too quickly if the stock market collapses, as seems increasingly possible. The aging bull may have one last hurrah left, but if so, it would be the best opportunity we’ve seen in a generation to get short. Tuesday’s SPY tout takes a stab at this (see below), so check it out if you’re interested in a relatively low-risk bet using out-of-the-money put calendar spreads.
