CPI Tomorrow: Volatility Incoming For SPX. Can Bulls Keep The Run Going? Feb 12 Plan
As I discussed yesterday, the last three weeks ES has been stuck in a time warp, following the exact same cycle: ES opens Sunday with a gap down due to weekend headlines (two weeks ago it was due to Deepseek AI, last week it was due to Tariffs, this week it was due to Tariffs). As we know, most deep, headline driven sells in ES result in my core setup, the Failed Breakdown to trigger long. For the last three weeks in a row, this occurred on Sunday/Monday. We then rallied for much the week, to fill that Sunday gap, then sold off on Friday.
Not only that, but ES has also spent this duration mostly in the same range (largely 6020 to 6125, with a 6070 magnet with a few excursions above and below). As a result, this has made ES highly predictable as we engage the same zones over and over again. I wrote last Wednesday at 4pm (when we were 6070s): “My general lean is always to defer to the trend until proven otherwise. Bulls want to hold 6066-70 ideally. This keeps 6099, 6115, then 6125-30 live.” By Friday, we hit 6125 high of day (top of range), and sold.
It should be no shock where this Sunday sell off took us: Back to range support. I wrote on Friday at 4pm: “For Monday, bulls will want to hold 6016-20. This would allow ES to work back up to range resistance, starting with 6066-70 which is the 1st gateway, then 6093, then onto 6129.” Right after Sundays open, we sold down to 6016-20 exact, then rallied to 6093 high of day yesterday.
Today repeated the same script, and we rallied back to 6093 once again, and continued the push higher. As I wrote yesterday: “We are in a market now that is basically set to “grind up” by default, until it is hit with a Tariff related Tape Bomb.” We didn’t get any today, and therefore grinded up.
Tomorrow is CPI however. Can CPI break us out of this multi-week range (or down)?In today’s newsletter I’ll talk this, I’ll do a deep dive into the action we saw Thursday into today, as we rarely, saw all three of my setup types back to back. Readers know I inordinately focus on Failed Breakdowns (because they work the best) but a small % of my trades are my other two, and they are worth knowing. Finally, I’ll discuss the actionable trade plan for tomorrow.