Calm Before The Storm? CPI Day Incoming. August 10th Plan

It’s difficult to summarize todays trading since - quite literally - almost nothing happened. None of the setups posted in yesterdays newsletter triggered, and after last week (which was the tightest range week of 2022), ES has been putting increasingly tight range days, stuck roughly between 4105 and 4160 for well over a week with only brief excursions outside the zone which were also traps.

Seasonally, this is not surprising. We are in peak “summer doldrums”. Low volume, low volatility, low follow through all characterize this time of the year. As I mentioned yesterday, over the past 50 years, this is also seasonally the choppiest, most directionless time of year. There is however, a catalyst incoming to wake the market up with tomorrows CPI.

The last two CPI’s both delivered major volatility. In July’s for example, we saw a quick initial spike higher, 125 point drop, then 85 point rally after all in the same day. In today’s newsletter, I’ll talk the plan for tomorrows release, how I’m trading it, and some major risks here for bulls.