[Re-Send] CPI Incoming. Expect Volatility in SPX. What Way? September 13th Plan
NOTE: This is a re-send of yesterdays newsletter for today (September 13th) as some reported not receiving it due to technical issues.
After starting September off with a 110 point sell, last Thursday we put in a bottoming setup (my core setup - the failed breakdown of the prior days low) for what I’ve called “the relief bounce”. This relief bounce went 60 points from Thursdays low to yesterdays highs and after this run, it spent much of today swinging in a wide, bi-directional range with both bulls and bears getting trapped. Why the price confusion? Because tomorrow is CPI.
This choppy price action was expected today. I wrote in yesterdays newsletter: “We remain in complex September trading - take it level to level and do not assume there will ever be follow through. 4540-4520 is now a new consolidation zone and we likely play ping pong inside it more” adding “4516 I’d try a knife catch long”. This is what we saw today. After ping ponging all morning in that range, at 11am we dipped to 4516, after we which we rallied to 4540 resistance, rejected back into the range, before a late day flush to new lows and the 90% of the session was spent in that 4520-4540 ping pong zone.
This is ultimately all noise though before tomorrows extreme CPI volatility. These are hardest, most volatile days of the year. How much more does this relief rally leg have left? In today’s newsletter I’ll talk this, I’ll then go into detail on CPI days, how they trade, and how to trade them. I’ll finally describe the actionable trade plan for tomorrow,