I cannot cannot short this...

12 באפר׳ 2023

Today's CPI data (down to 5.0% from 6.0% YoY) created interesting and actionable price action this morning... more on my thoughts about it later.

Technically the data release created a Spike Alert by punching through the pre-market high and then closing back inside it before the cash open. This is happening within two important contexts:

• A double top for the price action of April's highs
  
• The 4155.25 level which is the most important level of 2023
  

4155.25 is the 50% Retracement for the entire 2022 bear market. This is THE level which the S&P 500 has been holding all year and stubbornly refusing to break higher.

The first time it was hit was the December 2022 CPI data. That signaled the December bear trend to yet another key 50% Support. The next time was the top of the January 2023 rally that got everyone excited. Following the recent February/March malaise price is once again testing this level.

The CPI data release has very much driven the highs and low (October CPI being the major bottom) for the last many months. Inflation, and how the Fed handles it, has driven this current era of the stock market (and all risk assets). While the news is that inflation is coming down it is still well above the Fed's target 2.0% rate. There is no guarantee or sign that the Fed will change its mind.

Yesterday I sat in on a presentation that juxtaposed the current GDP numbers (which have been recently positive) with the LEI (Leading Indicators) which are sending up a recession signal. I am ALWAYS hesitant to take FUD into account in my analysis. However, the signal is the signal. The trade of this post is based upon a confluence of four factors (news event, spike, double top, 50% Retracement). My rules state that I must trade this... win or lose. The LEI is also a signal that has a high probability of efficacy. It should also be heeded.

14 באפר׳ 2023

עסקה סגורה: הגיע לסטופ

Disappointing end to a crisp, clean setup. But this stop out tells me something...

The level of 4155 is still very important. If price has conquered it then we have evidence that the market is in fact, bullish. I am humble to change my mind and position as the market tells me.

14 באפר׳ 2023

הערה

As we push into the close we do NOT have a solid break of the level. But the trade for now and the week is over. That's just how it goes. I will not be opposed to taking a bearish setup next week.