To The Moon

The most dangerous CPI of 2026 drops tomorrow 8:30am.

And the risk is pointing in only one direction:

Inflation went 2.4% in Feb to 4.2% in May.

That's not cooling that's the fastest reacceleration in years. Tomorrow tells us if the top is in, or if this is just getting started.

Here's what makes it print low: energy.

The Iran/Hormuz oil spike that drove 60%+ of last month's jump is fading, and gas has rolled over. That alone drags headline from 4.2% down to around 3.8%.

On the surface it looks like relief.

But here's what makes it print high everything that doesn't fade. Shelter is still sticky. Tariffs are bleeding into core goods. Services never cooled. Energy leaves, but these stay. That's the trap sitting under the "cooling" headline.

So ignore the headline number. Watch core CPI instead. Expected to tick from 2.9% to 2.8%. If core comes in hot, it means the oil shock leaked into everything else, and that's the number that actually moves the tape.

The Fed already flinched. In June they raised their 2026 inflation forecast to 3.6% and pushed the rate dot up to 3.8%. Cuts are off the table until inflation proves it's dead, and the next decision is July 29. A hot core kills the cut.

Now look at the setup. The $SPDR S&P 500 ETF Trust(SPY)$ is sitting right on 7,500, up 18% off the March lows, trading at a 20.4 forward P/E versus a 19.0 average, with 80% of Nasdaq longs offside.

I'm interested in buying SPY calls when it hits $740 and goes below it.

Three ways this breaks. Cool core at 2.7% or below and cuts come back on the table, squeezing us to new highs. In-line at 2.8% and it's a shrug, already priced, chop. Hot core at 3.0%+ and the cut narrative dies, triggering a sharp flush. Notice the asymmetry.

That's why the risk points one direction. Upside is capped because a good print is already priced in. Downside is violent because a hot print has nothing to catch it. Limited reward, fat left tail.

Where does SPY go by year-end?

Bear case, if inflation sticks and the Fed stays hard, around $700.

Base case, chop near the highs at $745 to $765. Bull case, if core cools and cuts return, roughly $790 and history leans that way, since the index has averaged +6% into year-end after a record first half.

Tomorrow won't just move a candle. It sets up the Fed's July 29 decision and the tone into year-end. One number, 8:30 AM. Watch core, not the headline.