August CPI came in hot, rising 0.1% in August instead of the consensus 0.1% decline. Core was even worse: 0.6% versus 0.3% consensus. The annual print also disappointed, coming in at 8.3% versus expectations of 8.0% or less.
Having slightly overshot our 4153 target overnight, ES is now reversing sharply.
continued for members…
The remainder of the charts were printed prior to the CPI release, but the targets remain unchanged.
This data should remove any doubts about another 75 bps hike. TNX certainly agrees…
Update: EOD
Ugly day, but it could have been worse.
SPX was down 4.32% today. The Dow was off 3.94% and the Nasdaq fell 5.16%. Some sectors did better, others worse.
Anyone would agree that a worse than expected CPI print in the midst of a tightening cycle is a negative for stocks. There would have been little reaction if CPI came in at 2.1% versus the previous month’s 1.8%. The surprise for many investors is that TPTB didn’t step in to save the market. But, the night is young.
Last, SPY closed right at trend line support. So, no guarantee that this will carry through to tomorrow. The SPX and VIX charts also show that we’re at the brink of a breakdown.
Last, SPY closed right at trend line support. So, no guarantee that this will carry through to tomorrow. The SPX and VIX charts also show that we’re at the brink of a breakdown.
Check out SPX’s H&S Pattern. It targets 3445, pretty close to our original July target.
Note that VIX got halted at the same level as previous attempted breakouts. Stay tuned.