<p>Happy Sunday traders. As we enter the middle of December OPEX, last week was a massive winner in the stack, with our MSFT core long position turning into superb trade. Remember this saying: from compression, comes expansion. </p><p>I don’t think bullish sentiment and euphoria could be stronger right now in equities, and largely for good reasons. The dollar has remained stubbornly below $107, so that’s one major headwind that remains idle. Even with geopolitical turmoil in the Middle East, crude remains lifeless and the trend of slowly grinding lower continues. Inflationary assets such as gold & silver also remain range bound, so another headwind for equities remains mute. The point of this: many, many retail traders fall into the trap of trying to look for reasons to be short equities, and purposely trying to time the top in indexes… while overlooking the simple fact that equities <em>need </em>a reason to go down; but conveniently ignoring the fact equities <em>don’t </em>need a reason to move higher.</p><p>Just under ten days out, is December FOMC. Tradoors are largely favoring another 25bps rate cut. Not a surprise here, as I’ve maintained that once the Fed began this cutting cycle earlier this year, it was not going to end so soon.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd1e7bc8-89b0-42b1-81c0-d7deabcac4ea_2832x1614.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="830" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fdd1e7bc8-89b0-42b1-81c0-d7deabcac4ea_2832x1614.png" width="1456" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div><p> That said, looking ahead for this week we do have inflation data coming with monthly CPI on Wednesday morning and monthly PPI on Thursday morning. If the markets are looking for a catalyst to move lower, a surprise hot print in CPI on Wednesday morning would likely be the catalyst. How high are the odds of a hot CPI print? No idea, but a hot print will send the dollar higher → strong headwind for equities like tech & growth, and gold.</p><p>One last note ~ since Trump’s victory last month, SPX has rallied 4%, or over 230+ points since the election. It is <em>reasonable </em>to be cautious at current levels without any sort of correction. To be clear, a hot inflation print this week likely presents a buying opportunity, even if it’s just a 2-3% correction off ATH.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" href="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F435c92b9-610b-4444-a58d-9fa35a784647_3286x1862.png" target="_blank"><div class="image2-inset"><source type="image/webp" /><img alt="" class="sizing-normal" height="825" src="https://substackcdn.com/image/fetch/w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F435c92b9-610b-4444-a58d-9fa35a784647_3286x1862.png" width="1456" /><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><div class="pencraft pc-reset icon-container restack-image"><svg class="lucide lucide-refresh-cw" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><path d="M3 12a9 9 0 0 1 9-9 9.75 9.75 0 0 1 6.74 2.74L21 8"></path><path d="M21 3v5h-5"></path><path d="M21 12a9 9 0 0 1-9 9 9.75 9.75 0 0 1-6.74-2.74L3 16"></path><path d="M8 16H3v5"></path></svg></div><div class="pencraft pc-reset icon-container view-image"><svg class="lucide lucide-maximize2" fill="none" height="20" stroke="currentColor" stroke-linecap="round" stroke-linejoin="round" stroke-width="2" viewBox="0 0 24 24" width="20" xmlns="http://www.w3.org/2000/svg"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></div></div></div></div></a></figure></div>
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