At least one governmental official has now acknowledge that "Inflation is High" (Uncle Ben Aug 5th). However it did not scare the market.
The immediate reaction to the FOMC statement was very little. Volume in that 15 bar was the highest of the day. The Rut future only moved from 713-716, taking it all back in the next minutes.Only after the bond market closed @ 3:30 the stock market picked up.
I am happy that I don't need to make money directionally in this market. Of course the non-directional trading style has not been profitable this month. Consider the alternative go long here, or be the contrarian and short here. I still stick with my original suggestion - short term UP, but feel not sure enough to make a bet.
Portfolio wise this was a great day. You could have guessed that since you know I am over weighted in GE.
The remainder butterfly with all it's problems this month has become a positive trade. When we take it of the market I will write a 'full confession' on all the mistakes made.
Here under you will find the graph. Check the Greeks the closer we come to expiration the bigger role gamma starts to play. Currently we are short 22 delta with a gamma of 5. If tomorrow bring us a full ATR (16) up than the new delta is 22+5*16; over 100. For a 3-6-3 butterfly that is not prudent risk management. This means I am in a tight spot. I need some overnight reflexion on how I will continue to manage it.
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