CPI Is the Focus, Now.

Trading MCD, GOOGL, BB and MSFT.

The midterm elections are rolling in, but the main focus is going to be the CPI report on Thursday morning. Last Friday’s labor report did nothing to help change the rate-hiking rhetoric from the Fed, but the biggest component to their decision is inflation. 

That said, one report won’t change the Fed’s mind — either dovish or hawkish — although it could alter whether the Fed decides to go with a 50 bps or 75 bps hike in December. Right now, those odds are sitting near 50/50, with a small lean toward a 50 bps hike. 

In-line or hot results could change that to a 75 bps hike, though.

Technical Edge — 

• NYSE Breadth: 63% Upside Volume

• Advance/Decline: 60% Advance 

• VIX: ~$25.50

Yesterday, the /ES did what we needed it to do, powering over the 3821 pivot, then climbing to 3842.50, then 3860. After the late-day dip, now it’s sort of in no man’s land again. 

I don’t like taking a notable position ahead of binary events — like the CPI tomorrow morning. What I do know is, yesterday’s range matters and today’s will too.

S&P 500 — ES 

Specifically for today, keep an eye on the overnight ranges. That’s ~3849 on the upside and 3812 on the downside. 

A push above 3850 without reversing lower puts 3867 in play. Above that and 3900 is on tap. A break below 3812 opens the door down to 3792 to 3800. 

ES — Zoomed In