Time to buck the data

S&P 500 loved the low CPI, and then had trouble extending gains – even the China deal outline announcement didn‘t bring significant buying. Just as the three indices surged, they gave up their gains, and started to struggle meaningfully heading into the closing bell (ES < 6,006 support presented yesterday), on Iran tensions and sabre-rattling news by both sides (well, all three sides).

Macroeconomically it was a raging bullish setup to see CPI at 0.1% that has the power to bring fresh money into Treasuries, and bonds in general (and coporate bonds held up better, which is why I shared with clients the bond market chart).

There had been risk aversion in the air, taking down the greatest (interest-rate sensitive) jumping IWM that had a nice run since the second half of last week, My conclusion was that only a break below a certain level through 5980s would be concerning for it would be clear bucking of the totally bullish incoming CPI data – and not merely a reaction to geopolitical risk (that oil bullish call worked well for Trading Signals clients, the stock market is hanging in there at the moment.

The below chart was shared annotated, yesterday with clients, today‘s data takeaway shared with clients, and today‘s video lays out even more details, so make sure to review it...