How Market Risk Just Got Bigger

The Fed raised 25 basis points and gave no forward guidance at all. Risk in this market went up after that announcement.

One number proves it. The SPX priced a $128 expected move for the entire week.

Monday, Tuesday, and Wednesday are already in the books. Friday’s expiration still implies plus or minus $91.

Most of the week’s risk now sits inside two sessions.

I started tonight’s session in the September S&P 500 futures contract. We dropped right back into the volatility box and tagged 7511 almost spot on.

I call 7511 the warm fuzzy spot. Risk goes there to die. The box runs 7350 on the bottom and roughly 7700 on top.

The SPX dragged us back to it. Nearly five million contracts traded there today.

Tesla (TSLA) traded two and a half million. Nvidia (NVDA) traded three million. Nothing else on the board moves that kind of notional value.

Plenty of traders want to check the VIX right now. The VIX measures volatility 30 days out. I want the temperature in front of me.

Here’s what I walked through in tonight’s video:

The Fed hiked 25 basis points and offered zero forward guidance. Kevin Warsh saw his own shadow and the S&P 500 sold a little, then bounced into the close.
The SPX traded close to five million contracts today. Nvidia traded three million and Tesla traded two and a half. Everything pales next to that capital flow.
The week priced a $128 expected move. Three sessions are already spent and Friday still implies plus or minus $91. The risk picked up dramatically.
SPX 7530 is the lower edge of the expected move. We tagged it and reverberated straight back up. A crest back through it into Thursday and Friday rips volatility to the downside.
Oil sits at $102 a barrel. The 10 year closed above 5% and looks ready to explode higher. The dollar keeps rallying into new highs, and S&P futures are priced in dollars.

The financials already see it. Rate hikes should help them. They took the brunt of today’s hit instead.

The Nasdaq (QQQ) held together and semiconductors closed up 0.6%. The AI trade is the only thing holding this tape up.

Any one of those macro readings I can live with. All three together are very hard to ignore.