Every other central bank is cutting. The Fed is alone in the corner.. and inflation just walked back into the room.
Quiet week on the tape, loud week under the hood.
The Macro Regime Engine is still firmly risk-on in a reflation regime.. 32 bullish votes to 15 bearish, and the bullish count actually ticked higher this week. SPX and QQQ stay 100% long. Bitcoin and gold remain at 50%. Ethereum, however, got cut loose Monday morning when its signal from Sunday got confirmed & flipped flat.
The bigger story is sitting upstream of price:
Inflation is back. Core CPI and CPI YoY both came in hot. PPI and Core PPI came in way hotter than forecast.
The Fed is now the only major central bank in the world without rate cuts priced in. Every other major CB is pricing 2–4 hikes. FedWatch shows hike odds creeping into the back half of the year.. 4.2% in July, 17% in September, with December even showing a 10% chance of a 50bp hike.
Kevin Warsh was confirmed as the new Fed Chair this week. Powell’s tenure is officially over.
Old put spread sleeve closed, new bull put spread sleeve is being rolled.. one contract a day until I’m back to five.
The signals haven’t changed direction. But the wind around them has.
Next week is a quiet one on the calendar.. just unemployment claims and a couple of PMI prints for May 17–23. Outside of any noise from the Xi/U.S. meeting headlines, not much scheduled to move the tape.
The honest read on this week: not much to do.
The signals didn’t change for equities, BTC, or gold. The only real action was getting flushed out of Ethereum on Sunday and starting to rebuild the bull put spread sleeve. Everything else is sit-on-your-hands work.
But the texture of the regime is shifting. Inflation is back on the board. The rest of the world is pricing hikes. The Fed is the lone holdout with zero hikes priced in.. and that gap is exactly the kind of thing that closes violently when it closes. We stay long while the engine says long, but we don’t fall asleep on the wheel.
Survival is alpha. The system keeps us in until it tells us to step out. That’s the entire job.
Have a great weekend. Get off the screen. The signals will be here Monday.
For this week’s full video breakdown:
— Durden out.
✊🧼
Disclaimer: This content is for educational and informational purposes only. It does not constitute financial advice, investment advice, or a recommendation to buy or sell any asset. Trading equities and futures involves substantial risk of loss, including the potential for loss exceeding your initial investment.
Past performance, whether backtested or live, does not guarantee future results. Backtested performance has inherent limitations: it is designed with the benefit of hindsight, does not reflect actual trading, and does not account for all factors that may affect real-world execution.
The author is not a licensed financial advisor. Always do your own research and consult a qualified financial professional before making investment decisions. You are solely responsible for your own trading decisions.
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