Follow up to my risk-off view

Last week I wrote a post about how I was getting more bearish on risk assets due to my view that the Fed will hold, not cut, in their December meeting. Since then, two data points have emerged that have changed my view from bearish to neutral - a soft September employment number that gives the Fed cover to cut again, and statements by the Fed’s Williams that suggests he is in the dovish camp advocating for a cut.

I’ve taken profit on my risk shorts and will be looking to add back some long term holdings in my portfolio after having raised some cash last week. Big picture-wise, I believe we are still in a bull market, as labor and inflation will remain soft next year and allow the Fed to continue easing policy. A lot of froth has come out of the most speculative parts of the market, allowing entries at better valuations.

The following section is for paid subscribers, where I lay out the tactical trades I’m putting on in my trading book.