April's CPI Surprise: Can Bulls Charge Forward For Now?
Updated
SPDR S&P 500 FUTURES ( 
ESM2023) & ETF ( 
SPY ) - Market Update - 10/10/23
The April Consumer Price Index (CPI) report showed a 0.4% increase last month, driven by rising shelter, used vehicle, and gas prices. This increase met Wall Street expectations, and the annual inflation rate of 4.9% came in slightly below estimates, providing hope for a lower trend. For workers, real average hourly earnings, adjusted for inflation, rose 0.1% for the month but were still down 0.5% from a year ago. These CPI figures provided a stick save for ES_F.
A massive 60-point range started with a failed breakout at 4176, and ES_F tested the overnight low, flushing to the 4114 support level. An intraday bull flag formed at the 4118-4123 support zone, with bulls getting long at the 4129-4134 range. A broadening formation (megaphone) pattern emerged at 4114, with resistance at 4176-4180. The rising uptrend channel from the March 2023 low is highlighted in yellow, establishing new support at 4134.
Bull Case:
On any pullback, look for re-entry to go long at the 4145-4146 level. If we move above 4145, the new magnet zone is 4176-4181. The 4166 support level is also a good magnet.
Bear Case:
On any pullback, look for re-entry to go short below 4134.
Economic Factors:
Keep an eye on the PPI-Final Demand and Jobless Claims data released at 8:30AM (EST) today.
Bonds:
The US10Y supports the bull case on the 4-hour chart with a new lower low. A symmetrical triangle pattern with a 5-day rising support range is visible, extending from 3.0308% to 3.311%.
Support Levels:
4134-32 (major), 4122, 4114-16 (major), 4111, 4105, 4092, 4082-78 (major), 4061, 4048 (major - broadening formation support), 4037, 4020-22 (major), 4011 (major), 3997, 3984 (major), 3978, 3952 (major), 3942, 3935 (major), 3904 (major), 3892 (major)
Resistance Levels:
4146 (major), 4154, 4166, 4176-81 (major, broadening formation support), 4188-92 (major), 4200, 4210, 4218-20 (major), 4230 (major - broadening formation support), 4243-46 (major), 4256
Final Thoughts:
As the market continues to digest April's CPI surprise, traders should remain vigilant and watch key support and resistance levels. The bull case still has potential, but it is crucial to monitor economic factors, such as PPI-Final Demand and Jobless Claims data, as well as bond market developments.
Not Investment Advice:
Please note that the information and strategies shared in this newsletter are for informational and educational purposes only. They should not be considered investment advice, nor should they be used as a basis for making any investment decisions. Always consult a financial professional before making any investment decisions, and ensure you understand the risks involved in trading and investing.
ESM2023) & ETF ( SPY ) - Market Update - 10/10/23The April Consumer Price Index (CPI) report showed a 0.4% increase last month, driven by rising shelter, used vehicle, and gas prices. This increase met Wall Street expectations, and the annual inflation rate of 4.9% came in slightly below estimates, providing hope for a lower trend. For workers, real average hourly earnings, adjusted for inflation, rose 0.1% for the month but were still down 0.5% from a year ago. These CPI figures provided a stick save for ES_F.
A massive 60-point range started with a failed breakout at 4176, and ES_F tested the overnight low, flushing to the 4114 support level. An intraday bull flag formed at the 4118-4123 support zone, with bulls getting long at the 4129-4134 range. A broadening formation (megaphone) pattern emerged at 4114, with resistance at 4176-4180. The rising uptrend channel from the March 2023 low is highlighted in yellow, establishing new support at 4134.
Bull Case:
On any pullback, look for re-entry to go long at the 4145-4146 level. If we move above 4145, the new magnet zone is 4176-4181. The 4166 support level is also a good magnet.
Bear Case:
On any pullback, look for re-entry to go short below 4134.
Economic Factors:
Keep an eye on the PPI-Final Demand and Jobless Claims data released at 8:30AM (EST) today.
Bonds:
The US10Y supports the bull case on the 4-hour chart with a new lower low. A symmetrical triangle pattern with a 5-day rising support range is visible, extending from 3.0308% to 3.311%.
Support Levels:
4134-32 (major), 4122, 4114-16 (major), 4111, 4105, 4092, 4082-78 (major), 4061, 4048 (major - broadening formation support), 4037, 4020-22 (major), 4011 (major), 3997, 3984 (major), 3978, 3952 (major), 3942, 3935 (major), 3904 (major), 3892 (major)
Resistance Levels:
4146 (major), 4154, 4166, 4176-81 (major, broadening formation support), 4188-92 (major), 4200, 4210, 4218-20 (major), 4230 (major - broadening formation support), 4243-46 (major), 4256
Final Thoughts:
As the market continues to digest April's CPI surprise, traders should remain vigilant and watch key support and resistance levels. The bull case still has potential, but it is crucial to monitor economic factors, such as PPI-Final Demand and Jobless Claims data, as well as bond market developments.
Not Investment Advice:
Please note that the information and strategies shared in this newsletter are for informational and educational purposes only. They should not be considered investment advice, nor should they be used as a basis for making any investment decisions. Always consult a financial professional before making any investment decisions, and ensure you understand the risks involved in trading and investing.
Trade active
Picked up ES_F buy at 4148.50 based on that 4145-4146 pullback to support. 💰Trade closed manually
Sold ES_F 4163 based on the bull flag breakout.Trade active
Sold ES_F at 4153 with a limit order to buy at first intraday support 4146. Stop loss at 4156.Note
Bought ES_F back to close at 4147Note
Picked up ES_F buy at 4138 with a tight stop at 4136Note
Sold ES_F 4142Note
ES_F basing here in the 4118 - 4124 support range. Bulls reverse course above 4145 - 4146. 4118 support lost we continue down to 4114-4116 support.Note
📈 Complex trading day for ES_F. Bull flag forming, needs to break 4145 for upside momentum. Entered long at 4130. 🚀Trade closed manually
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