Portfolio & Biotech Update, Fake CPI Boosts Squeeze Odds

If symmetry holds, XBI takes a run towards $87 tomorrow. I have a little left on the position, as my calls were for July 15.

My main holdings now are long TLT and SMH, short oil. The XLC trade goes on, but it is far OTM and not a significant amount of capital. Notice the correlation of QQQ and TLT, or below SMH and TLT. The seeds are there for a rally and if the relationship between TLT and SMH holds up, and TLT hits my target of around $120, OTM calls on SMH are dirt cheap. That's a lot of pieces and SMH can plummet with the whole market even as TLT rallies, but if I'm right...

The market plunged into the close. The peso has a clean breakdown and it is positively correlated with VIX:

A crash window is open. However, the rallies have been sold into the close on most days. Going back to what I've been saying the past couple of weeks, a big rally could be building because nobody believes a large rally is possible, not bears, not bulls. I also suspect there is frontrunning of what everyone knows will be a very bad CPI report. Witness crude and copper today as evidence.

There also was a fake CPI number going around. I don't know if that impacted the sell-off or not late in the day. CNBC was reporting on it, so maybe. If yes, my expectation of a squeeze tomorrow goes up. The number was obviously fake because a quick calculation showed it would take a 2.44 percent month-on-month increase, which ain't happening. How stupid is CNBC? The Cleveland Fed Nowcast rounds to 1 percent mom and 8.7 percent yoy. The market is very jittery and could go in either direction, but my gut says the market goes up. And if not, I have USO and TLT for a reason.