Trading Journal: Epic Set-Up. Bottom Line

Disclaimer

This is for informational purposes only.

Discussion

SPX is bearing down on a generational short set-up. We’re so close. But as I’ve been journaling about in real time over on the Market Journal channel, the current set-up is very bullish in the short-term. I think at minimum we rip on a soft Core CPI print tomorrow. We’ll have to monitor the character of the rip for signs it’s a continuation of the on-going rally, or a “sell the news” event. I’m wide open to either scenario: If we get a decisive sell-the-rip rally with VOL and HY CDX up big with defensives outperforming, I will at minimum sell my call position, if not go back into my core October SPY $400 put position; and if it’s a continuation rally that is likely to continue, I will hold with a close eye on the exits.

That’s my read of the current market structure, but I like to supplement that analysis with others whom I highly respect. On that front, just in the last couple of days key Flows & Liquidity “Team” member, The Kitty, has both confirmed the near-term bullish set-up…

…And the generational short set-up.

And then tonight, one of The Kitty’s own teammates put together a hugely important thread detailing why FED tightening is set to hit in 2H23 just as everyone is getting comfortable going long equities. As I type, I’m listening to a Twitter space with very reasonable folks calmly arguing the Fed doesn’t matter and rate hikes are actually inflationary.

LFG.