SPX Is Coiled Tight. CPI Volatility Incoming. October 13th Plan

In every newsletter week, I’ve said the exact same thing, writing in Monday’s newsletter: “I expect a very choppy, “ping pong” sort of week. This means be prepared for more days like today - this will be a week for tactical day trading”. As the week goes on, this has become more and more true. We remain largely stuck in the 3575-3630 zone, and the swings inside the range are becoming tighter, the moves smaller, and the follow through poorer.

This is a rare combination of both a tightly coiled market, plus a very obvious technical catalyst with CPI tomorrow at 830AM. ES typically produces its biggest reactions on CPI days, as well as FOMC days. Most traders likely remember the last CPI day on September 13th: ES put in an initial spike of 25 points, followed by a 179 point red day. This started a 600 point move lower. August CPI was just a volatile, but to the upside.

These days are notoriously trappy and hard to trade. In todays newsletter, I’ll be going over how I traded today’s chop via yesterdays plan (talking trade management), talk about why bulls are at increased risk now, then I’ll talk about the plan for tomorrow/path ahead and I’m how I’m trading it