9/13 Daily Recap, Outlook, and Trading Plan
Recap
The market experienced a choppy session yesterday with both bulls and bears getting trapped. The price confusion was expected due to today's CPI. After a 60-point relief bounce from Thursday's low to Monday's highs, the market spent much of yesterday swinging in a wide, bi-directional range. The session was spent mostly in the 4520-4540 ping pong zone.
Market Gauge
🟡 Neutral
The Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Up slightly
🛢 Crude Oil: Up
💵 Dollar: Down slightly
🧐 Yields: Up
🔮 Crypto: Up
World News
Monthly core inflation prints much hotter than expected at 0.3% vs the 0.2% consensus.
Key Structures
A large triangle has formed with 4454 level being support and resistance being 4570ish now. This is now the core pattern for September and everything between 4454-4570 is a broad chop range/play ground for ES. This could easily fill out all month. These patterns have a mild 60% upward resolution bias.
Support Levels
Supports for the ES are at: 4504, 4498-96 (major), 4486, 4473 (major), 4463-66, 4449 (major), 4434, 4424, 4418 (major), 4395-4400 (major), 4386, 4367, 4356 (major), 4337 (major), 4316, 4307, 4285-90 (major).
Resistance Levels
Resistances are: 4516, 4525 (major), 4532 (major), 4540-42, 4545-47 (major), 4556, 4562, 4569-72 (major), 4581, 4585 (major), 4590, 4597, 4605-4609 (major), 4615, 4630-33 (major), 4638, 4648(major), 4658, 4666 (major), 4673, 4681 (major).
Trading Plan
Today is CPI Day and it is expected to be one of the most volatile, random, difficult, and trap-filled days of the year. The introduction of an external data catalyst introduces an enormous amount of sometimes impossible to trade algo-driven noise. The rule for trading these days is to size down and do not over-trade. There is absolutely no reason to incur a large loss on a day that all traders know fully in advance will be challenging. It is not uncommon to see 100+ point moves both ways.
Wrap Up
In summary, there is no predictability to CPI days and one can only know the levels and be prepared to react. These are my least favorite days to trade of the year. If it were a normal day (which is all I can go by), my general lean is as long as 4503-4497 defends, that we push back to 4540s, perhaps dip once more, then try the run to triangle resistance at 4569-72. That is the decision point and it needs to breakout to formally start the next leg up. 4497 fail and we work down the levels.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
The market experienced a choppy session yesterday with both bulls and bears getting trapped. The price confusion was expected due to today's CPI. After a 60-point relief bounce from Thursday's low to Monday's highs, the market spent much of yesterday swinging in a wide, bi-directional range. The session was spent mostly in the 4520-4540 ping pong zone.
Market Gauge
🟡 Neutral
The Markets Overnight
🌏 Asia: Down
🌍 Europe: Down
🌎 US Index Futures: Up slightly
🛢 Crude Oil: Up
💵 Dollar: Down slightly
🧐 Yields: Up
🔮 Crypto: Up
World News
Monthly core inflation prints much hotter than expected at 0.3% vs the 0.2% consensus.
Key Structures
A large triangle has formed with 4454 level being support and resistance being 4570ish now. This is now the core pattern for September and everything between 4454-4570 is a broad chop range/play ground for ES. This could easily fill out all month. These patterns have a mild 60% upward resolution bias.
Support Levels
Supports for the ES are at: 4504, 4498-96 (major), 4486, 4473 (major), 4463-66, 4449 (major), 4434, 4424, 4418 (major), 4395-4400 (major), 4386, 4367, 4356 (major), 4337 (major), 4316, 4307, 4285-90 (major).
Resistance Levels
Resistances are: 4516, 4525 (major), 4532 (major), 4540-42, 4545-47 (major), 4556, 4562, 4569-72 (major), 4581, 4585 (major), 4590, 4597, 4605-4609 (major), 4615, 4630-33 (major), 4638, 4648(major), 4658, 4666 (major), 4673, 4681 (major).
Trading Plan
Today is CPI Day and it is expected to be one of the most volatile, random, difficult, and trap-filled days of the year. The introduction of an external data catalyst introduces an enormous amount of sometimes impossible to trade algo-driven noise. The rule for trading these days is to size down and do not over-trade. There is absolutely no reason to incur a large loss on a day that all traders know fully in advance will be challenging. It is not uncommon to see 100+ point moves both ways.
Wrap Up
In summary, there is no predictability to CPI days and one can only know the levels and be prepared to react. These are my least favorite days to trade of the year. If it were a normal day (which is all I can go by), my general lean is as long as 4503-4497 defends, that we push back to 4540s, perhaps dip once more, then try the run to triangle resistance at 4569-72. That is the decision point and it needs to breakout to formally start the next leg up. 4497 fail and we work down the levels.
Disclosure: This is not financial advice and is for informational purposes only. Please consult a professional financial advisor before making any investment decisions.
