• Monday: Fed Williams @ 12pm
• Tuesday: Nothing much.
• Wednesday - woo! 
  • ADP Employment Change (private sector) @ 8:15 
  • GDP @ 8:30
  • Chicago PMI @ 9:45
  • JOLTS @ 10:00 ⚠️
  • JPow @ 1:30pm ⚠️
• Thursday: PCE @ 0830 ⚠️
• Friday: Nonfarm Payrolls @ 0830 ⚠️

• Last week: I don’t think I made a single trade.  Busy + short week.  Held same positions.
• Before we discuss this week, there’s two sections from Alf (brilliant macro guy) that you should read - if you don’t read entire article
• https://themacrocompass.substack.com/i/85090257/the-yield-curve 
  • The thing is bond markets are NOT pricing in a true recession, but just a marked economic slowdown coupled with a Fed mostly on hold in 2023 and perhaps easing a bit into 2024 to gently accompany a slow recovery.
• https://themacrocompass.substack.com/i/86332633/conclusions-and-asset-allocation 
  • In 2000, the Fed hiked to 6.5% and took off the excess animal spirits in markets.
     In 2022, the Fed hiked to ~5% and took off the excess animal spirits in markets.
     In 2001, job market losses and earnings contraction followed.
     In 2023…the economy is going to be a reflection of the massive monetary and fiscal tightening in 2022.
•  This week: Party starts on Wednesday morning with ADP, gets warmed up with JOLTS at 10am, and then finale with JPow at 1:30pm (this is NOT an FOMC speech, but one from a conference covering employment and inflation).
• Thursday has the ever-important PCE (Fed’s preferred measure - since it keys in on consumer spending)
• Friday has non-farm payrolls premarket.  JPow is likely to shift focus to jobs even more and that will make this Friday’s report even more important.
• I’m going to attach a screenshot of the calendar this week that shows nothing but positive data expected (for the Fed Trade), except consumer spending (still going up). This week forecast calls for JOLTS to show a drop (bullish for market on Fed Trade), EU CPI to downtick a little, PCE to come down (and significant drop in MoM); non-farm to put on 200k vs 261k (last month); hourly earnings to downtick - all good for the Fed Trade.
• I think the Fed Trade remains in play and is clearly the focus for now - but not for much longer.  This is the trade of the narrative of the Fed and their expected actions.  December 14, it will cement for many months what is going to happen.  I expect JPow to come in with 50bps, raise SEP from previous, and then note they are going to hold rates in restrictive territory for a while to see how things play out.  That means it’s a long pause - at some point - and even longer until they start dropping rates.  I think we’re going to see over 6% Fed Funds rate by the time it’s done - maybe even 7%.  Then, that’s it.  Time for the market to find something else to obsess and speculate about.
• After the Fed Trade is out or focus (starting January 2023), the new focus will shift to two things: earnings and unemployment.  Earnings are going to keep whiffing and unemployment should start going up by then.  This should continue the march down on the market.  I’m still looking for SPY 320.  Reminder: AAPL hasn’t cracked yet.
• I am worried - for the economy in general - about this relentless consumer spending.  Folks just aren’t backing down despite layoffs getting wound up and about to shift up a gear.  Are we just going run off a cliff?  Buy buy buy, SPLAT?
• SPY 405 is also an upcoming 200MA test.  It has been rejected the last two times it hit this MA.  It dovetails perfectly with a rejection on Nov 30 if the data + JPow comes in ‘not as good as hoped’
• Next Sunday I’ll go over why the CPI must come down mathematically but it can completely disengaging from inflation reality.  It might already be a bad measure, but it for sure will be next year.

• SPY levels:  386, 390, 396, 400, 405 (200MA), 410, 416
• Chart - Weekly: Bullish - for now.  CPI broke the downtrend; marching up until it has a reason to turn around - Nov 30 or Dec 14.
• Chart - Daily: Bullish - for another day or two - is this August 2022 all over again?  Sure looks like it.
• Chart - 4h: Bullish - could push higher in the next few days - then very toppy.

• Current position: SPX 3700p Feb 28 2023 puts.  Two now at ~3900 SPX breakeven.
• I’ll add one more put at 405, one more at 410 - then I’m just sitting tight.
• Otherwise, I’m just sticking to the plan that’s working - trading short-term calls on strength.  Not holding overnight or into any data releases - as positive as they are expected to be, too risky.