What Happened? - 

• We had a surprise 100 BPS hike from the Swedish Bank and that triggered a gap down. We set a new weekly low to 381 and closed near 384. All in all, this was a choppy few days leading into the main event on Wednesday. 

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

• Wednesday - Existing Home Sales at 10am EST
• Wednesday - FOMC statement and press conference starting at 2pm.  This is the major event of the week. 
• Thursday - UK Rate Hike Decision at 7:00am EST
• Thursday - COST and FDX earnings afterhours. 
• Friday - JPow with another speech at 2:00pm EST. 

Current Positions and Plays:

• I had a let go of my SPX calls for a nasty loss today and started building a 10/31 3800p position. I will be playing a 1DTE strangle for FOMC.

What Do I Think?

• SPY Technicals - The 30 min, 1 hour, 4 hour and the daily are all 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. 
• Technicals are setup for a nice move based on the FOMC data tomorrow. 

THE PLAYS OF THE DAY for WEDNESDAY for SPY:

• There is no play until the FOMC 2pm data release. The most important number in this release will be the 2022 economic projections for the Fed Funds Rate. You can get that data at federalreserve.gov/monetarypol.... This info gets released every other FOMC meeting and the last one was in June's meeting. 
• Important Data: Current Fed Funds Rate: 2.5%. Projection for 2022 End of the Year for Fed Funds: 3.4% (released in June's meeting).
• I will enter a strangle for Thursday's expiration that will be OTM by 2 points at 1:30pm before FOMC. I will let one die and one fly. This is not going to be as big as a play as I did for CPI. But I will put enough in to make me feel something. 
• Scenario 1: We get a 75 BPS hike and the 2022 economic fed funds rate projection is over 4.25%. This is a bearish data release, so it will be up to JPow to turn the market around with his commentary. If he is able to make the market go up, this is a fade the rip opportunity on Thursday or Friday. 
• Scenario 2: We get a 75 BPS hike and the 2022 economic fed funds rate projection is at 4% or less. This will make the market blast higher and will fuel that the Fed is going to pivot very soon. 
• Scenario 3: We get a 100 BPS hike and the 2022 economic fed funds rate projection is over 4.25%. This is bearish and I will load up on puts as we are hitting new June lows. 
• Scenario 4: We get a 100 BPS hike and the 2022 economic fed funds rate projection is under 4%. This would be a bullish event and will signal very dovish Fed ahead in November's meeting. 
• FOMC will provide the direction of the market for the next week until the PCE data next Friday. Bulls will hope that Powell will be dovish and hint at slowing rate hikes down in his statement and press conference. Bears will hope for Powell to keep the same strong hawkish tone from Jackson Hole and lean on the fact that no new economic data has come out to allow Powell to start slowing rate hikes down.
• 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 380 > 383 > 387 > 390 > 393 > 396 > 400 > 404.40