WYNTK before Trading Tomorrow, Sept. 13th 2022 Trading Levels

Stock Index futures are entering the “rollover period”.

Somewhat of a choppy intraday price action.

December is now the front month/ higher volume.

September will expire this coming Friday at 8:30 Am Central time.

Tomorrow we have an anticipated CPI report ahead of next week’s FOMC. Below is a good informative piece by my colleague, John Thorpe:

Has the Stock Market bottomed?

In the Yardeni Bull/Bear index, the last temperature taken on Sep. 7th, there were .53.3 % bearish vs only .18% bullish sentiment for the Stock market. With the August Consumer Price Index Release 7:30 am Central time, the Peak inflation game speculation may be nearly done.

What I mean by that is we will have established a turn in the voracity of “the Summer of Inflation” IF the year over year change is less than last month’s 8.5 %, the consensus is a reading between 7.9-8.3 % ( whenever i talk about consensus right before a report you can damn well know that is already discounted by the market) The commonly quoted inflation rate is actually the change in the CPI from the year earlier or Yr/yr. see lower number. Now think of the number being released with three potential outcomes relative to the consensus. Higher than, the same as or less than expectations. If the market has been rallying because of the consensus, and we believe we can make an argument this is true, then the markets reaction to a Higher CPI number will provide a backdrop for a sharp sell off in equities. If the CPI number is a lower number than consensus, I could make a strong case for the market to rally and hold it. And finally, if the CPI numbers are in line with expectations, the sellers will be more aggressive as the previous weeks ralies will have been overdone in anticipation of lower CPI numbers and expect the market to sell off as it waits for more data. CPI is currently an important indicator for market direction as the FED uses some of this data to drive it’s rate decision making process.. I included the Yardeni Bull/Bear ration to give you a sense that even with the rally in the stocks these past few weeks, many institutions are Bearish yet still, and may be close to a capitulation point if the CPI Data is extremely positive tomorrow. (CPI % lower than consensus. Plan your trade and trade your plan.

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