We’ve opened new bullish trade on Philip Morris (PM). While we want to be very careful about new bullish positions as the market creeps up on resistance, the Fed’s emphasis on inflation and a slow pace to interest-rate increases should be very good for consumer staples in the short term.

We expect that a break beyond PM’s October highs should send Philip Morris shares into the $95-$97 range.

‘Buy to open’ the PM January 90 Calls (PM160115C00090000) for a maximum price of $1.05.

While we like a bullish position on Philip Morris as the market prices in a bigger premium for dividend-payers while investors remain relatively cautious,  we suggest giving the Fed news a day or two  before getting too committed to the market going one direction or the other. It usually takes a day or more before the market settles down and begins to trend again following big FOMC reports.

Despite all the hoopla surrounding Wednesday’s announcement, the real issue the Fed is facing right now is not incremental increases to the overnight target interest rate. The problem it is facing is deteriorating conditions in the debt market. Some traders might automatically assume that we are referring to the recent volatility in the fixed-income mutual fund and ETF market, which is understandable, but junk-bond mutual funds are merely one segment of a very large asset class.

What may become the real issue in the short term is the same problem we faced in 2008 when credit derivatives like collateralized debt obligations (CDO), mortgage-backed securities (MBS) and credit default swaps (CDS) all collapsed around the mortgage market. Like an endless game of “Whack-a-Mole,” the bubble that popped in real-estate financing in 2009 was merely shifted to corporate debt when the Fed stepped into the market with endless rounds of quantitative easing.

When a company issues bonds for corporate actions like an acquisition (there have been more than $1 trillion worth of this activity in 2015), the securities are often syndicated and wrapped up in collateralized loan obligations (CLO) or other derivatives with different tiers paying different yields. These and other structured bond products often disguise the real risk of the underlying debt because they seem diversified, but they really aren’t.

One of the ways we can monitor the health of the corporate bond market is by monitoring the value of the lowest level of CLOs (called the “equity tranche”) and the spread between high-yield debt and investment-grade debt yields. The yield on the equity tranche and the spread between high-yield debt and investment-grade bonds will both rise when investors are getting concerned about stability in the market.

Since last year, the equity level in CLOs has fallen in value by over 35%, and the spread between high-yield and investment-grade debt is back to the same level we saw before the last two recessions. One way to track the progress of these measures is shown in the next chart. The higher the option-adjusted spread (the blue line) rises, the more uncertain investors are about the market.

The problem the Fed faces right now is that the bubble in corporate debt (and its derivatives like CLOs) is already here and starting to pop. The SEC didn’t start really investigating them again until late 2014 and, by then, oil companies had already loaded up their balance sheets beyond any sense of reason. Assuming the reaction to Wednesday’s announcement remains positive in the short term, we believe that resistance on the S&P 500 will still hold due to these debt-market issues. We plan to remain relatively balanced in our SlingShot Trader portfolio, holding select long positions like Philip Morris, while putting an emphasis on bearish positions as stocks return to resistance.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.