Good morning, traders…
The market looked shaky at the beginning of last week. Three red days in a row saw the S&P 500 drop 1.7%.
But Friday changed everything.
Jerome Powell spoke in Jackson Hole, and the market finally heard what it’s been waiting for:
He didn’t promise rate cuts, but he pointed straight at them.
He said job growth is cooling. Wages are slowing. Inflation remains too high…
Then came the line:
“The current outlook may warrant adjusting our policy stance.”
That was it. That single sentence flipped the switch.
Traders didn’t care about the economic uncertainty. They finally saw the Fed blink.
The S&P 500 jumped over 1.5%. First green day in nearly a week. Not just a bounce. A reversal. The kind of move that makes funds chase.
What does that tell me? The market is laser-focused on Fed policy, the economic calendar, and inflation gauges.
Odds of a September rate cut surged into the mid-80s. The Fed will announce its next decision on September 17.
Until then, you need to pick your spots around these big economic data releases.
Anyone unaware of Powell’s speech last Friday might have a) missed a huge opportunity to trade long calls or b) got destroyed on puts.
Make no mistake: Macro is running the show right now.
That’s the catalyst I’m trading around.
Let’s Go Over The Biggest Events On This Week’s Economic Calendar (And Look At 6 Charts That Stand To Benefit From The Recent Trend Reversal)…
This Week’s Economic Calendar
Tuesday (Aug. 26)
- Durable goods orders (July)
- S&P Case-Shiller Home Price Index (June)
- Consumer Confidence Index (August)
Thursday (Aug. 28)
- Q2 Gross Domestic Product (GDP) numbers, second estimate
- Weekly jobless claims
- Pending home sales (July)
Friday (Aug. 29)
- Core PCE Price Index (July)
- Final University of Michigan Consumer Sentiment (August)
PCE is the one to circle. It’s one of the Fed’s preferred inflation gauges.
You should also pay close attention to Consumer Sentiment following last week’s weaker-than-expected retail earnings numbers.
My Top 6 Setups of the Week
Unity Software Inc. (NYSE: U)
My scanners show huge call flow in the U September 12 $40 Calls. This name’s been pressing against that $40 level for weeks. If it breaks through with volume, that contract has real upside. Price action looks coiled for a move higher.
Sunrun Inc. (NASDAQ: RUN)
Heavy volume hit the RUN September 17 $17 Calls. I’m already in this one. Still like the setup. Needs to hold above $16.20 to stay clean. If it tightens under $17, I’ll be watching for another breakout.
American Airlines Group Inc. (NASDAQ: AAL)
Big trades came in on the AAL September 5 $14 Calls. This stock doesn’t move fast, but the Smart Money bets are massive. If the chart breaks through $13.75, those calls could light up. Low risk, tight trigger.
Upstart Holdings Inc. (NASDAQ: UPST)
Short-term momentum showed up in the UPST August 29 $28 Calls. Just five days left on this one. Above $28.25, I’ll consider a quick trade.
Tesla Inc. (NASDAQ: TSLA)
If TSLA breaks above $350, I like the TSLA August 29 $355 Calls. That $350 level has been sticky. Let it clear, then jump in. Big name. Big range. It could move fast once it triggers.
MicroStrategy Inc. (NASDAQ: MSTR)
MSTR still interests me if it reclaims $355. I’d target the MSTR August 29 $370 Calls. This one’s not for the faint of heart. It moves fast and gaps hard. Watch it closely if it wakes up.
Last Friday gave us a clear shift in momentum, volume, and a narrative that the market believes.
Meanwhile, key levels are lining up with enormous Smart Money flow in names like U, RUN, and TSLA.
Durable goods, GDP, and PCE data are on deck.
That’s your roadmap.
Let those releases set the pace. Let the key price levels trigger the trades.
Want to learn how to execute trades like this?*
The best place to start is in our Smart Money Workshops.
You’re one click away from the best setups in the options market.
Join us TODAY at 12:00 p.m. EST.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results