CPI Report Incoming For SPX Tomorrow. Expect Volatility. December 12 Plan
Friday concluded as many Friday’s in the past month have in ES: With a substantial trend day and 50 point rally higher into a fresh high. The prior Friday (Dec 1st) did the exact same thing with a 45 point rally to new highs. After a strong Friday rally though, we often get what I call “hangover Monday” and we saw some of that today with ES spending nearly all day chopping in a 15 point range before an afternoon slow drift higher.
As readers recall, I’ve had 1 single target for the entire month of November and into December, which I’ve written about daily: 4667 (March contract) and on Friday/today, we finally hit it after a multi-hundred point rally. This is the most important level on my chart, and I wrote on Friday: “We are closing today right near 4667 major resistance which is the trendline from 2022s highs. If ES is to try some sort of dip ahead of FOMC or CPI, this is the spot”. ES spent the entire morning basing below here before “breaking out” in the afternoon.
There is an issue though with this “breakout”, and that is that tomorrow is CPI Day. Readers recall last CPI saw a 100+ point instant squeeze, and last Decembers CPI saw a 140 point instant rally then retracement. In today’s newsletter, I’ll talk the plan for CPI tomorrow, go over the setup that started this most recent 60+ rally from Friday (its my core setup), then discuss the actionable trade plan for CPI tomorrow.