CPI Report Kills Rally Before It Starts

How it responds now is important.

Please keep a lookout for this week’s video. We hit a snare with the rendering, so it’s likely it will not be ready before the newsletter & it will come in a separate post! 

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Technical Edge — 

• NYSE Breadth: 58% Downside Volume

• NASDAQ Breadth: 52% Upside Volume

• VIX: ~$32

In back-to-back sessions, it’s clear the market is trying to find its footing. The key word here is “Trying.” If it can do so, then we could be looking at a decent dead-cat bounce here. 

The CPI report just came in a little hot and higher than expected. That could kill this bounce before it even gets going. But if we rally on bad news, that could have a meaningful implications in the near term. 

Now we find out how meaningful that two-day low really is as it will likely be put to the test.

Bonds are rallying again, meaning yields are in decline, while the VIX is coming in. The semi stocks are trying to rally and Bitcoin has found some support (at least in the short term). 

Further, we have a number of two-day lows to measure against in many assets, including the SMH, SPY, QQQ, NVDA, ARKK, etc.

I am not a full-on bull by any means, but we have to be aware of the two-way flow and bear market rallies. 

Game Plan — S&P, Nasdaq, Bitcoin, Individual Stocks

Today’s video hit a snag on the rendering, but goes over the ES, SPY, NQ, QQQ, TLT, NVDA, SMH, ABBV, ARKK, AAPL and VIX. 

So there’s a lot in there to unpack, but it’s on it’s way soon!

S&P 500

Clearing last week’s low at 4056 and yesterday’s high at 4065.50 could open the door up to the 4100 to 4130 area, a nice 30 to 60 point trade if the bulls can take momentum. 

On the downside, 3950 is going to be key. A break of this level that’s not reclaimed could open the door down to 3900.