Weekly Market Outlook 10/13
Strength to Strength
Hello traders,
Hope you had a great weekend.
Quick recap of of select trades from last week.
I went long on CL at 73.89, seeing a good opportunity to catch the upside move. The market started working in my favor, climbing steadily. As it approached higher, I was trimming for anyone holding the position.
This was a straightforward trade—entered at a solid level, rode the move up, and trimmed at a key resistance zones to lock in profits. Keeping things simple and managing risk with timely trims helped secure gains as the trade progressed.
Standard SPX lotto.
I shorted NQ at 20,020.75, seeing a good chance to catch some downside. Took half off early to lock in some profits as the market moved in my favor. After that, I reset the stop to keep things under control, ensuring the trade was protected.
Trimmed more at +30 points, securing additional gains and reducing risk further. Around 9:19 PM, I took another 50 points off the table, keeping the stop at breakeven for the remaining position. With the main part of the trade wrapped up, I left the rest to run while I grabbed dinner.
This trade was all about managing risk—taking partial profits at key levels and resetting stops to protect gains. The breakeven stop ensured I had no downside exposure on the remaining position, allowing me to step away without worry.
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Moving on,
The macro landscape pivots: growth, seemingly reinvigorated since early August, now regains traction, while inflation—once presumed dormant—has quietly reversed course.
The timing could scarcely be more ironic; the Fed’s preemptive 50bps rate cut aligns awkwardly with inflation seemingly bottoming out. September’s CPI print showed a 0.18% month-over-month rise, while the annualized figure dipped marginally from 2.5% to 2.4%, modestly outstripping expectations of 2.3%—a subtle but non-negligible overshoot.
What’s particularly striking is that ES continues to hover near record highs while the unusual persistence for volatility with VIX at 20 or so given the circumstances. At the same time, put skew has re-converged toward levels reminiscent of August’s Yen crash.
The implication? Markets are not merely hedged but fortified to a degree that stymies downside momentum absent a catalyst capable of overwhelming these defenses. Even amidst heightened turbulence in oil and fixed income markets, alongside escalating geopolitical tensions across the Middle East, equities have exhibited a surprising degree of stability—an indication that embedded hedges remain operative, capping losses. For this precarious equilibrium to unravel, the system likely requires a genuine exogenous shock: perhaps an escalatory retaliation by Israel, unexpectedly abysmal economic indicators suggesting imminent contraction, or a political curveball—such as a decisive electoral outcome, red or blue, that catches participants off-guard.
This dynamic reflects the accumulation of substantial latent potential—analogous to a coiled spring poised to release energy either through momentum-driven rallies or a sharp correction in response to systemic shocks. As long as a discontinuity remains absent, the market structure will likely exhibit a positive skew, favoring continued price appreciation. This drift, however, is less a product of investor conviction and more a function of diminishing risk premiums, as fear gradually recedes from the system.
What does this mean in plain english mate?