Rocket Equities & Options Report 09-21-23
We have done our best to sit patiently waiting to short this market, and the time has finally come. This market has accelerated higher on artificial intelligence euphoria, along with growth projections, but now it is facing the very real threat of much higher rates for much longer than once anticipated.
We are going short this market with options. The VIX is still under 17, as the S&P has lost 3.5% just from last Friday's high of 4,566 in the ES Futures.
This market is coming into the lows of August and I expect us to break this area and trade lower, with a price projection of about the 4,200 area in the ES futures, and potentially lower depending on how we trade into that area.
The 10 year is pushing new cycle highs at almost 4.5% this morning, and the 2 year is spiking to almost a yield of 5.2%.
We now have higher crude prices, which will weigh on consumers, as well as student loan payments beginning at the same time.
The next Fed meeting and decision is November 1st. We are going out in the options market almost up to that date, as I expect this market will face some serious headwinds leading up the next meeting.
Buy the October 27th $435 SPY Put (trading about $7.00)
Sell the October 27th $415 SPY Put (trading about $2.35)
This results in a net debit of about $4.65 or $465 per contract pair.