Even a dead cat bounces... but what about a dead Fed cut?

Those who got long last night betting on a dead cat bounce are... well... dead this morning before they even finish their coffee. 10-year is down nearly 3/4. Wouldn't surprise me if this bounced a little from here today, but I feel pretty confident there are no real money buyers right now.

Vol is back. At least for now. I seem to remember thinking that back on February 27 and it turned out not so much. Anyway, swap spreads are gapping wider. The 10 year swap is now at +62 after being as low as +53 in May.

Slope is back. Remember when 2-10 was inverted? You know... way back on Tuesday? We're around +18 now. Hit +20 overnight.

I'm not sure what to do here. I feel like the risk/reward of a outright bearish rate stance is becoming poor. I also think people sometimes make their worst trading decisions when the market is rapidly moving, especially if its moving against them. Sometimes its good to step back, get neutral, and think things through.

I think the right call is to get net short the market but add some out of the money calls to protect against a sudden rally. I'm working on other ideas.