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2022 October 6th EST Daily Memorandum


Nothing contained in the following content constitutes an offer, solicitation, or recommendation regarding any investment management product or service, or the offer to sell or the solicitation of an offer to buy any security; The following content is purely for information only and is based on information available at the time it was created. It does not take your financial situation or goals into consideration, and may not be suited for you.

Table of Content
  1. Current Thesis

  2. Executive Summary - prior day as the anchor

  3. Today at Close - Higher Level Overview & Analysis Based on Our Quantitative Indicators for selected Indexes & Indicator heat charts

  4. Expectations & Analysis for Tomorrow in Detail

Current Thesis

The thesis of interest rate hikes will continue to govern trades from the current to earlier next year. The highest projected terminal rate is expected to be around 4.51 - 4.70%. As a result, rising rate hike expectations continue to drive the underlying credit market-related indexes. The general thesis for the remaining year is outlined in the following article: Is Volcker Shock Coming Back? In light of the ECB speech, we reaffirm the position, and views presented in the following article: The stagflation debt crisis and a narrowing path for monetary policy.

Executive Summary

We see significant downside risk to the S&P 500, NASDAQ, and Dow Jones Industrial Average and remain bullish on the credit market and reverse index as indicated in the 2022 September 27th EST Daily Memorandum for the long term.

We call the official ending of 2022 September 28th EST Daily Memorandum set up on the credit market, this should lead to an end of ST relief rally as well. Today, the market pulled back and wrestled with the bulls. The market has currently priced in the potential of Fed pivot based on job openings, with the August US higher than expected PCE and the EU sliding into recession on PMI numbers, how the market reacts to the unclear policy turns may still take time to materialize. Further, we may not see central bank actions materialize in the short term as this is a risky step Fed currently cannot take and Fed has also reaffirmed today it will continue to hike until reaching the target 2% interest rate.

For setup tomorrow:


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