Today is day 10 in traders’ hell. The narrowest part of the range that needs to be broken to get anything started on the hourly ES, S&P 24 hour continuous fuguetures is 4107-4148. But to really break the pattern enough to get something going on the downside they would need to punch below 4100.
On the upside, the next resistance and top of the pattern is at 4195.
The hourly oscillators look bottomy and a 5 day cycle low is due. From that perspective the bulls would have the edge today. Even if they do, it shouldn’t last long.
Of course today at 8:30 AM ET we get CPI. That should get something going. Here’s my favorite chart of government “inflation” pre CPI release.
Of course, none of these really measure inflation as defined as a rise in the general price level, because they all exclude house prices and understate rent increases. And the government’s use of contract rents rather than actual current market rents means that the change in the rent component will lag the market by many months, if not a year or more. So when market rents start to moderate or decline, contract rents will lag that change, leaving the government’s inflation prints higher than actual for months.
We’re not there yet, but that will punch the government statistical manipulators in the face.
Then there’s the business of hedonic replacements, replacing goods that are rising fastest with goods that are similar but with less utility and lower quality, and of course lower prices and slower price increases. So yeah, general inflation really is closer to 13% than 9%. But hey, who’s counting?
Certainly not the Fed.
To understand and profit from the big picture check out the following.
- Swing Trade Screens – One Bad Trade Hurt But the Rest Bailed Us Out for a Win August 8, 2022
- Fasten Your Seatbelts – Updated Cycle Projections Are Shocking August 8, 2022
- “As Good as It Gets” Was Good While It Lasted August 6, 2022
- Upon Further Review Gold Bottom Call Stands August 5, 2022
- Treasury Confirms Supply Tsunami We Expected – Will Obliterate Everything August 3, 2022
- Withholding Tax Collections Solid in July, But Here’s Why the Party is Over August 2, 2022
- The Bond Rally That Fooled The Majority And Didn’t Help Dealers July 27, 2022
- As Good As it Gets, Before the End of Time July 18, 2022
- Are the Fed and Treasury Geniuses, or Just Lucky? Part One July 12, 2022
If you’re serious about the underlying forces of supply and demand that drive the markets, join me!
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