🎢 Hike Day. Drama. Then... Green.
The Fed raised rates, Wall Street panicked, and then stocks closed higher anyway. Classic.
GM, Spotters. This is BotSpot, brought to you by the team behind Lumiwealth. Every week we unpack the market stories worth knowing about, with plain English, a clear head, and Spot watching the charts so you don't have to.
- 🏔️ The Fed hiked rates again. Markets threw a fit, then recovered. We unpack why.
- 🐂 Bulls vs. bears on a year-end rally: Citadel says buy the dip, Dean Curnutt says brace for 10% pain.
- 📉 Jobless claims dropped to 196,000. The labor market is still stubbornly unbothered.
- 🤖 AI stocks are back in the spotlight, and the Nasdaq is heading for a weekly gain.
- 🎯 Spot's strategy corner: a classic vol play built for exactly this kind of uncertain market.
The Market Said 'Thanks' to the Rate Hike. We Are Also Confused.
The Fed raised rates this week. For the first time in three years. And then, in the most September thing possible, stocks went up.
The S&P 500 rose 1.14% the day after the hike. Treasury yields fell. Oil prices dropped. Everyone who prepared for disaster got a participation trophy instead.
1.14% — S&P 500 gain the day AFTER the Fed hiked rates. Yes, you read that right.
Here is the context that matters. September is historically the worst month for stocks. Like, it has been bad since 1930. Tax-loss selling, back-to-school panic, whatever the reason, September bites.
This September had extra seasoning: oil prices climbing on war fears, AI anxiety hitting a new pitch, and now a rate hike on top. The bears were sharpening their claws all month.
"This appears to be the market's vote of confidence."
— Chris Osmond, CIO at Fifth Third Wealth Advisors, after stocks closed green on hike day
The market did not read the script.
So what is actually happening? Two camps have formed, and they could not disagree more loudly. Camp One, led by Macro Risk Advisors CEO Dean Curnutt, says a 10% S&P pullback is still on the table. Higher borrowing costs squeeze corporate margins. Consumer spending slows. He pointed to 2018 as a rhyme: September hike, surging yields, Big Tech rotation, no Santa Claus rally. Sound familiar?
Camp Two, led by Citadel Securities, says the opposite. They found that since 1930, the S&P has fallen an average of 1.1% in the last two weeks of September before bouncing hard in October. Goldman Sachs adds that across seven rate-hiking cycles, the S&P posted an average 12-month gain of 9% after the first hike.
👉 The news is the Fed hiked rates and markets shrugged it off (for now). The takeaway for you is that the green close is not a green light: the next few weeks will show whether bulls or bears read September correctly.
- Watch the last two weeks of September: history says this is the soft spot before an October bounce.
- Watch Goldman Sachs and corporate bond issuance: if underwriting slows more, the bear case gets louder.
- Watch jobless claims: 196,000 this week is strong. If that number rises, the Fed's resolve gets tested.
- Watch AI stocks: Nasdaq is heading for a weekly gain. That is the market's real vote of optimism right now.
Explore rate cycles on BotSpot
Playing Both Sides of a Confused Market
Thinking through it
When bulls and bears are screaming at each other this loudly, price swings tend to follow. The market does not stay calm when everyone disagrees this much. That is an interesting structural moment to study.
A long straddle is one structure traders study in moments like this. You buy a call and a put at the same price and expiration on the same asset. You don't care which direction the market moves. You care that it moves a lot.
Asset: SPY (S&P 500 ETF) (Options / ETF)
If the bulls-vs-bears debate is this heated, a large price move in either direction is plausible before year-end. A long straddle on SPY is an educational example of how a trader might position for big movement without picking a direction.
Mechanics
| Field | Value |
|---|---|
| INSTRUMENT | SPY (S&P 500 ETF) |
| STRUCTURE | Long call + long put at the same strike and expiration (a straddle) |
| THESIS DRIVER | High disagreement between bulls and bears often precedes large price moves |
| KEY RISK | If price stays flat, both legs lose value over time (time decay, or 'theta') |
| WATCH FOR | Implied volatility level at purchase: buying options when vol is already high makes the straddle more expensive |
Why it matters: The news is the market is caught between a 10% pullback warning and a Citadel bull case for year-end. The takeaway for you is that when smart people disagree this loudly, studying how two-directional structures work is worth your time.
For educational purposes only. Not investment advice. Always do your own research.
👉 Not a recommendation to trade this. More like a thought experiment: what does the structure look like, and what has to happen for it to work out?
The Boring Strategy That Hates Septembers (In a Good Way)
How it works
The SPY 50/200 Moving Average Crossover is one of the oldest tricks in the book. When the 50-day average price crosses above the 200-day average, you go long. When it crosses below, you step aside or go flat. Simple. Almost embarrassingly so.
The trade-off is real: you will always be a little late. The crossover happens after the move has started. But the logic is that it keeps you out of the worst sustained drops, which is exactly the kind of thing that matters in a September like this one.
Strategy: SPY 50/200 Moving Average Crossover Category: MOMENTUM / TREND-FOLLOWING This strategy buys SPY when the 50-day average price rises above the 200-day average, and exits when it falls below. It is designed to ride sustained trends and sidestep prolonged drops. The main cost is lag: you enter after a move starts and exit after it reverses. In choppy markets, it can whipsaw in and out repeatedly. Worth running your own numbers to see how it has handled past Septembers and rate-hike cycles specifically. Browse on the BotSpot Marketplace Backtest it on BotSpot Educational only. Backtest the strategy yourself on BotSpot to draw your own conclusions.
👉 Don't take our word for it. Run the backtest yourself and see what September looks like in the data.
Spot's Mood Meter
Mood: Neutral (VIX 15.3)
VIX at 15.3 means the market is calm on the surface but twitchy underneath. Think: someone smiling at a dinner party while their phone buzzes nonstop.
The Market This Week, Summarized
The Quick Bites Before You Go
- The Fed hiked. First time in three years. Everyone had a plan for this moment. The market immediately ignored the plan.
- S&P 500 up 1.14% on hike day. Somewhere, a bear is refreshing his thesis document.
- Citadel says October will be fine. Since 1930, the last two weeks of September dip and then bounce. History as emotional support.
- Macro Risk Advisors warns of a 10% drop. They also pointed to 2018. No Santa Claus rally that year. Just vibes and regret.
- Jobless claims fell to 196,000. The labor market is doing fine and is not interested in your recession narrative right now.
- Goldman Sachs CEO flagged softer bond trading. His stock fell 4%. Turns out investors prefer CEOs who shrug.
- AI stocks are carrying the Nasdaq this week. The index is heading for a weekly gain. The robots are, once again, keeping the lights on.
The BotSpot Team
Issue 21 · Sep 18, 2026