Disclaimer
This is for informational purposes only.
Discussion
Trade: Bought more SPY September $440 and October $420 puts, with room to add if necessary tomorrow.
Rationale: Powell is not going to be dovish tomorrow, and the stickiness in HY CDX confirms, IMO. And despite the push to HOD, defensives are hanging in there. Perhaps a red VVIX is sniffing out upside from GOOG and MSFT earnings tonight, but earnings season has not been kind so far, and I don’t expect strength to persist at this point.
The path ahead is a 5-10% correction that rinses hedges; return to highs if not the ATH by the end of August underpinned by the rumor Powell will be dovish; followed by a major decline into September/October as a good chunk of the lagged effect of rate hikes hits economic and earnings data.