I’ll put out a longer update later, but remember this week on May 4th Ka-Powell has a press conference, and on the 5th we have Jobless claims and non-farm productivity comes out, and Friday the 6th NY Fed, ATL Fed, ST.L Fed, and SanFran Fed will give speeches. Lots of data coming out, so just be careful, with High Vix, we could get some big Whips.
One of the reasons I’m delayed on this update is because I’m trying to figure out if the drop we saw last week will give us a short squeeze because all the contracts are on the short and put side of the aisle, but it seems like the real money flows in the Qs, XLK, XLY, XLRE, XLV, XLC are just sell signals.
The majority of calls and puts on SPX are really down at the 4000, 4050; and we have the old resistance at 4200… but the question in my mind is, will we have massive dip buying into an FOMC meeting?! I think risks are to the downside.
The market is trying to figure out if these lower growth expectations are enough to get the Fed to back off, or if the Fed will lean into their hawkish tone. I think they need to see inflation come down, and stay consistently down, not just down one month and then back up the next.