I’m making the bet here the Bond Bears may have overshot here. And today’s trading action feels to me like $TLT put in an actionable level to lean against for risk management purposes.

This is not a bet that the final bottom is in for bonds. Only that odds favor a bounce that might have some legs.

With this caveat out of the way, here’s how I’m going to play it.

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Well, every attempt I’ve made at wading back into the bull market pool has been swiftly met by a destabilizing splash made by a bear cannonballing off the diving board.

So, until further notice, I’m going to hang by the cabana sipping on my virgin daiquiri and waiting for calmer waters.

Meanwhile, I’m going to attempt to get paid while I wait by selling some delta-neutral premium in a (relatively) safer area of the market, as defined by a powerful bounce of recent lows in consumer staples. [Read more…]