Headline CPI dipped from 8.5% to 8.3% for April. While a very modest decline, at least it wasn’t an increase. As it was, futures immediately sold off nearly 100 points.
The benefit of such a drop from a charting standpoint it that it might enable SPX to reach our 3956.64 target on the open (it came within 1.53 at yesterday’s lows.) It might even allow the 20%-off mark to come into view.
It also enabled several other targets to be tagged. Gold finally dropped to our 200-day moving average target…
…and BTC is within 411 (so far) of our 28,600 target.
The big question, of course, is whether the support (which almost everything we chart has reached) will hold or not.
continued for members…VIX still hasn’t made higher highs, which means we still haven’t had the kind of capitulation that you’d normally see at a washout low.
Yes, the market has dropped a lot. But, it still hasn’t reached the -20% mark, well below the 3.618 Fib extensions for both ES and SPX…
And, it’s still quite a ways away from its pre-pandemic highs or even a modest retracement of the gains from Mar 2020.
COMP is well ahead of the pack.
There is also still a sense that everything else is a little too buttoned down. Currencies are relatively quiet…
…and CL/RB are on the rise again.
And, though the 10Y is still below 3.24, it’s also still above the .886 and higher on the CPI print – meaning the 2s10s is still an issue…
…and there’s more downside even if we get a substantial bounce here.
GLTA.