ES is well on its way to our initial downside target, aided largely by the reversal we have been expecting in oil and gas. EIA inventory data is due out at 11:00 ET this morning, which should confirm what the charts have indicated for months: the YoY price change was inconsistent with the inflation and interest rate outcome that both the administration and central bankers desperately need.
In goal-seeking markets, understanding this dynamic is more important than playing guessing games with inventory data. Unfortunately for equities, the free ride they’ve enjoyed on the back of rising oil prices is set for at least a pause.
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