CPI Tomorrow, Expect Volatility. Will SPX Finally Breakout It's 1.5 Week Range? Feb 14 Plan
It should come as no major surprise to newsletter readers, but Thursday/Friday’s dip was yet again bought as we remain in a buy-the-dip regime broadly since October’s low (and more acutely, since FOMC Feb 1st).
I wrote my last newsletter that my lean for Monday was: “As long as 4085 holds, my lean continues to be we chop and fill out the flag to 4128-35”. This played out perfectly, and we dipped to 4080-85 overnight, then rallied to 4128-35 target, exceeding it. For traders who missed the 4080-85 add, the 4110 provided entry also played out well. ES continues to build out a 2+ week bull flag, but there is a minor complication, which is CPI tomorrow morning.
CPI’s remain the most volatile, difficult to trade days of the year for ES, bar none. Readers likely recall the last CPI where we sold off 65 points, rallied 65 points, then sold off 65 points within 1.5 hrs. Can CPI ruin the bullish setup? In today’s newsletter I’ll be talking prior CPI’s, my strategy for trading them, and the actionable trade plan heading into tomorrow.