The rally off the August 18th lows is an overlapping mess that stands a high probability of concluding very soon, if not TODAY.
However, yesterday's CPI report market reaction marked a unique opportunity to remind followers, that markets are not linear. You can choose to look at the CPI report positively through a bullish or bearish lense. The reality was the pattern forming prior to the release was overlapping and signaled traders were uncommitted to higher or lower price action. In my trading room we debated the micro pattern the night before and, in the end, we had nothing constructive to the downside, nor the upside. Therefore, it really didn't matter what the report said, we had no micro pattern pointing us down. The upside was well contained within a larger counter trend rally and that was because we had no impulsive pattern up either.
I commented in my trading room, "Does anyone still feel markets are moved by news or events"?
A hotter than expected CPI discredits the narrative the Fed may be done raising rates. Therefore, one would expect the markets to sell off.
But the opposite happened.
You can choose to embrace any narrative you would like to explain that sort of price action. You can choose to invest or trade based on your personal perspectives…all of those buys and sells create a pattern. In reality, traders were telling us prior to the release...there was indecision about market direction and therefore we remained mired in this consolidation.
But I do think market participants will get the memo shortly. That’s because outside of the micro patterns, the larger patterns are telling us we have a meeting at 4312.25 regardless of your narrative, or perspective.
…and attendance is mandatory. See you all at the meeting.
Best to all,
Chris
However, yesterday's CPI report market reaction marked a unique opportunity to remind followers, that markets are not linear. You can choose to look at the CPI report positively through a bullish or bearish lense. The reality was the pattern forming prior to the release was overlapping and signaled traders were uncommitted to higher or lower price action. In my trading room we debated the micro pattern the night before and, in the end, we had nothing constructive to the downside, nor the upside. Therefore, it really didn't matter what the report said, we had no micro pattern pointing us down. The upside was well contained within a larger counter trend rally and that was because we had no impulsive pattern up either.
I commented in my trading room, "Does anyone still feel markets are moved by news or events"?
A hotter than expected CPI discredits the narrative the Fed may be done raising rates. Therefore, one would expect the markets to sell off.
But the opposite happened.
You can choose to embrace any narrative you would like to explain that sort of price action. You can choose to invest or trade based on your personal perspectives…all of those buys and sells create a pattern. In reality, traders were telling us prior to the release...there was indecision about market direction and therefore we remained mired in this consolidation.
But I do think market participants will get the memo shortly. That’s because outside of the micro patterns, the larger patterns are telling us we have a meeting at 4312.25 regardless of your narrative, or perspective.
…and attendance is mandatory. See you all at the meeting.
Best to all,
Chris
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