• Monday: Nothing.
• Tuesday: Nothing.
• Wednesday: Nothing.
• Thursday: Jobless claims @ 0830
• Friday: PPI @ 0830am & UMich Consumer Data @ 10am (this looks like economic data of the week..)
• NEXT WEEK: FOMC - Dec 14 @ 2pm - and it has SEP (Summary of Economic Projections).  Last FOMC until Feb 1 2023.

• Last week: Almost nailed the top with the 410 high range for last week.  JPow came in way more dovish than I expected and he sent the market flying.  I ditched my Feb 2023 puts for a loss and went long on calls - that was a prudent move.  I ended up nicely for the week instead of getting drilled.
• This week…..
• No Fed Speakers until Dec 14/FOMC.  Enjoy the peace!
• DXY and VIX drifting down still - VIX in particular is right at the spot it does two things - goes sideways for months OR spikes up violently.
• On Friday, the jobs report was very hot (unexpected) and it caused a sell off at the open that was entirely shrugged off by end of day — possibly due to JPow optimism from Wednesday OR what Alf spotted (not as hot as it seemed) - https://themacrocompass.substack.com/p/job-market-less-hot-than-you-think 
  • Alf has a straight forward take for 2023, as well - https://twitter.com/MacroAlf/status/1595086136107765760?s=20&t=Sj-tdJOnhvoQFWdMlUmXsQ
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• Is 75bps back on the table for Dec 14 due to that hot jobs report (last one before FOMC)?  It’s possible - JPow did leave that open - but I think it’s unlikely.  I think the data is all just lagging and there’s already more damage than the current data is showing.  While that would be good for the Fed Trade, we’re about to transition away from that and look at the Recession Trade.
• China relaxing its strict COVID rules in some cities.  Good for oil.
• Some technical observations 
  • DIA/Dow is only 2400 points from its ATH (that’s not much for the Dow to move based on its move-sizes in the last 60 days).  It has completely broken above its 2022 downward trend line.
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  • IWM has broken above its 2022 trend line and 200MA
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  • QQQ is right near its 2022 trend line (though still a bit away from the 200 MA)
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  • SPY pushed above its 200 MA and alllmost got above the 2022 trend line
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• This has been one hell of an impressive rally from 350 SPY.  That still-unexplained event from two CPIs ago, the recent CPI +20 day, and then JPow sending it another +12 on Wednesday added up quickly.
• I could be wrong, but I think the bulls are nearing maxed out on the Fed Trade + Peak Inflation narrative.  There will be little to get excited about after Dec 14.  It’s going to be 50bps (best case), he’s going to lay out a path of higher rates and longer - just slower to get there.  He’s going to warn there’s much work to do.
• CPI will keep coming down no matter what - maybe not in real terms but definitely in relative to YoY (very important to understand this point!).  The real number could be 10% inflation but the YoY vs 2021/2022 will keep dropping (just math..).  Unless we get a return of inflation run in 2023 later in the year - very possible.  Hello 1970’s!
• After the Fed Trade is done with, I don’t see the bull case - we’re staring down a recession, bad earnings, rising unemployment, no QE (QT, actually). 
• The consumer spending is still scary as hell - this has got to slow down - or we’re going off a cliff.  Unemployment should sort that out at some point.
• Overall, I see us marching up - slowly - into Dec 14.  After that? Maybe drift sideways with one final EOY/Santa Clause rally just to get those bonuses - then January/Feb I’m expecting a big dip when reality hits of what the market is going to face for the following 12 months and those unemployment numbers start spiking.

• SPY levels:  396, 400, 405 (200MA), 410, 416
• Chart - Weekly: Bullish - for now.  CPI + JPow really broke the trend on this one, impressive.  I’ll post this one below.
• Chart - Daily: Neutral - though small bullish lean.  We’re right at the 200MA.  DIA + IWM made it above it, SPY likely too as well before Dec 14
• Chart - 4h: Bullish - marching on upwards.

• Current position: Nothing.
• There’s nothing on the calendar this week.  It should be a low/normal volume, slow grind upwards until Thursday and especially Friday.
• Friday should be event of the week with PPI & UMich data out.
• I’ll pick up some calls on Monday and trade the strength.
• I’ll also be doing some March 2023 puts shopping (QQQ and SPX) since VIX is 19 - at some point between now and Dec 14.