Sunday’s plan was called “The turn held. Now the Fed.” It said one thing owned the week: Kevin Warsh’s first meeting. Lean long while the swing low holds, buy dips, but don’t chase the record into the meeting, because a hawkish first impression is the one risk that breaks the recovery. Monday gapped up on the Iran framework and closed at 7,626, clearing the hurdle. Tuesday held above it as the Dow printed a record. Then Wednesday afternoon Warsh delivered exactly the risk we flagged. The dot plot erased this year’s rate cut and put a hike on the table, the statement dropped its easing language, yields jumped, and ES sold the 2pm headline from 7,612 down to 7,472, a tag of our pivot, before closing back above it near 7,493. The S&P fell 1.2% on the day.
That’s the surface. Underneath, the pivot we mapped caught the exact low and held on the close, the line below was never threatened, and the leaders never broke rank. Memory, optical, and the chip-equipment names sit at the very top of the rankings even on a red day. Price took the hit. The structure didn’t.
The Lie: 0 NEUTRAL. Was +1 CONSTRUCTIVE Sunday. The cut-hope tailwind died and the conviction comes down a notch. The lean stays long, at half size.
The chart above is the week graded against Sunday’s plan, hits and misses both. The hurdle was cleared on the gap then given back on the Fed, the pivot paid its reaction on the one touch that mattered, and the defined-risk call spread took the loss it was sized to take. One note for tomorrow: with the Knicks parade pulling much of New York off the desks, the shortened Thursday session could trade quiet and pin-prone into the holiday.
Below the fold: the level-by-level scorecard, the hedging switch that defines the next hundred points, where the leadership quietly rotated this week, and why the calendar turns friendly the moment this week ends.
