Yo, Pit Crazies,

It’s no surprise these days that we, as traders, are caught in the web of the Fed and the next inflation sensitive number.

This week is no different from last week.

I, for one, will be happy when every market gyration is not caused by some Fed action.

It also means the Fed has overstayed its welcome in economic activities with accommodative monetary policy.

Now we are stuck with the central bank getting out.

Wednesday had a 2.5% range and a .20% down day for the S&P 500.

Red, red and more red.

What does that mean for next week’s CPI and PPI numbers?

The Range Has Been Set

I don’t usually make grand pronouncements, but the volatility ranges are there for a reason.

3600 SPX is the rate hiking bottom for now, and I do not see that change unless some of the other outside forces –  Ukraine, Nordstream pipeline, European energy woes, etc. – go from bad to worse.

5-day SPX with IV peak at 3600 and new IV low at 3800

An as-expected CPI number gets us to 3900, while a light one could push us to 4000 SPX.

The Fed raised fast enough when they realized its mistake, now they get to see if their handiwork is helping.

Expect 100-point, two-day ranges in SPX until and through Oct. 12 when the PPI number hits.

To Your Trading Success,

AG