Decision Day Tomorrow For SPX - CPI Incoming. November 10th Plan
After three big green days in a row and 155 point rally from last Friday, bulls finally ran out of steam and ES put in a good pullback day today. This is the 5th pullback that has occurred since the Oct 13th low which started this new rally cycle. Important to remember what happened October 13th: ES put in a classic bottoming setup by failing below the original October low and recovering it to put in a capitulation candle. It is also important to remember what the occasion was October 13th: It was the last CPI release day. The next, is tomorrow.
As we’ve seen, CPI days and FOMC days typically provoke the largest moves in SPX. Last CPI Oct 13th saw a 140 point spike down then 190 point rally in the same session. FOMC last Wednesday saw a 50 point spike up then 150 point sell in the same session. Be prepared for flexible, reactive day trading.
The question is - since last CPI Oct 13, ES has been back in buy dips mode, but can it continue after tomorrows CPI? In today’s newsletter, I’ll be discussing the two patterns that I see developing now that will control the action the rest of the month, and the actionable plan for how I am trading tomorrows session