US CPI game plan
|S&P 500 day of indecision lends more support to the bearish case, and the sellers are likely to appear with more force and somewhat better success today. The weak seasonality together with hawkish Fed bets (3m T-Bill made a new high at 5.31% now), will keep exerting pressure on the banks and their deposits situation).
Today‘s outlook is bearish, pointing to a break below 4,136 on a closing basis – and the countdown to recession keeping a lid on risk-on metrics (cyclicals, smallcaps) is on. Even crypto joined, which is a good sign no matter daily improvement in Nasdaq market breadth.
Depending on the strength of pre CPI positioning – my detailed prognosis for all of this week‘s macroeconomic data can be found in yesterday‘s extensive article - the bears can think about 4,128 (quite minor support) and crucially 4,115. Choppy day with a bearish bias is what‘s most likely ahead as tomorrow‘s hotter than expected inflation data would spur stock market selloff.
Keep enjoying the lively Twitter feed via keeping my tab open at all times (notifications on aren't enough) – combine with Telegram that always delivers my extra intraday calls (head off to Twitter to talk to me there), but getting the key daily analytics right into your mailbox is the bedrock. So, make sure you‘re signed up for the free newsletter and make use of both Twitter and Telegram - benefit and find out why I'm the most blocked market analyst and trader on Twitter.
Let‘s move right into the charts – today‘s full scale article contains 6 of them.
S&P 500 and Nasdaq outlook
Poor moves in KRE, XLF, XLB and XLI while tech including semiconductors continues underpinning the markets, don‘t bode well for good S&P 500 returns on the long side. Following the break of 4,039, the selloff would accelerate, but we‘re still long way from that figure. The preconditions are however in place, and crypto with banking are but the only indications.
4,078 break is the ultimate bearish objective to give them the clear upper hand (midweek?), and start ushering passive indexing readjustments aka broader synchronized selling.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.