Mid week update
Short term bottom soon
I think yesterday at $SPX 4240~ may have been the bottom for a couple weeks. Id say start putting on some long call spreads for Oct/Nov slightly OTM. Small chance we make a lower low tomorrow, in which case keep some dry powder.
I think we rally after Powell. This isnt FOMC, he is not giving a speech on monetary policy. Even if he was, what is he going to say that wasn’t said last week at FOMC, more importantly that the market doesn’t already know. If he doesn’t surprise the market hawkishly with NEW information, then we will see hedges unwind. There is also structural reasons for the market to be supported once the week/month end wraps up.
Much more detailed post coming on Sunday as usual. For now scale into calls. Leave some dry powder for tomorrow just in case we get a Powell or PCE surprise but we are very close to a bottom if we didn’t already make one yesterday.
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