What Happened? - 

• It was a pretty choppy day with a lot of mixed opinions. PPI came in a little hotter than expected in the morning on the core side and that led to small dip near the open to just under 392. We began to rally at the close to close near 395. 
• Bulls will lean on the 4 point move near the close as a signal that the all important 390 level will hold. 
• Bears will lean on the fact that we were up less than 1% on a day after we lost 4%. 

What to Expect on this Week (all times are EST)?

• Thursday - Retail Sales Data at 8:30am
• Friday - Quad Witching Day (OpEx)

Current Positions and Plays:

• I started grabbing SPX puts today for 2 weeks out. I am expecting a 390 test to happen by next Wednesday before FOMC. So I do not mind holding until then even if we start to move against the position. We either move down on fear of a 100 BPS hike possibility or we ignore that and then move down on the 75 BPS hike from a hawkish JPow due to Tuesday's CPI release. 

What Do I Think?

• SPY Technicals - The 30 min and 1 hour charts are slightly under an oversold reading. The 4 hour and Daily are neutral. 
• SPY Fibs for ATH to 2022 low - 390 is the .236 and 407 is the .382.
• SPY Fibs for COVID low to ATH - 380 is the .382 and 418 is the .286. 
• It is all about the 390 level. If that breaks, we are headed down fast. If it holds, more buyers will step in. 
• We got a hint from the Biden Admin that they are looking at buying oil at $80 a barrel to refill the strategic reserves. This is an indicator that oil prices could go up in the winter which is a high inflation tailwind. Also, when oil goes up, tech tends to come down. So keep this in mind with any long term thesis. 

THE PLAYS OF THE DAY for THURSDAY for SPY:

• Scenario 1: Retail Sales Data comes in good/strong. This will be a bearish event as this signals to the Fed that the economy is still running too hot and they need to kill the demand to get inflation under control. This should move the market down to the 390 target. 
• Scenario 2: Retail Sales Data comes in bad/weak. This could go either way. On one hand the market will see a weak consumer as a recessionary risk. On the other hand, a weaker consumer could be spun that the consumer is weakening so the Fed will not need to be as aggressive. This is a stretch, but it is possible. 
• Scenario 3: Retail Data is a nothing event and the market just consolidates and chops heading into the wild Quad Witching Friday. 
• I am holding my puts until the 390 break. If we hit 397 or 400 before then, I will grab more puts for a little longer out (mid October?) and close out my shorter term ones.  
• There is no scenario where I will play calls until FOMC.  
• NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
• This is not financial advice

Levels I am Watching

• $SPY - levels 383 > 387 > 390 > 393 > 396 > 400 > 404.40