It’s time to do our mid-month review of our crash comparisons. The SPY ETF is only 5.86 percent down from it’s post-COVID peak and it’s remarkable considering the Federal Reserve has raised rates by 500% over the past year!
The QQQ’s are only 6.2 percent from their peak in the post-COVID world!
But the most remarkable thing is how XHB is 0, yes ZERO, percent from the post-COVID peak.
What is truly interesting here is mortgage rates from 2020 to 2023 have increased from 2.65 to 6.96 percent and XHB hasn’t dropped in value! The Fed is poised to raise rates again at the next FOMC meeting on July 26 so we expect mortgage rates to possibly climb higher!
There is an expression that the market can stay irrational for far longer than most investors can stay solvent and we hope that’s not the case in our situation. We still hold PUT option positions for XHB at the $55 strike level for January 2024. We have 187 days to go till expiry so stay tuned, stay profitable and stay solvent…