TOMORROW EVENT STACK (ET)
07:00 - Bank of England rate decision + statement
04:00 - Norges Bank rate decision (Norway)
08:15 - ECB policy statement release
08:30 - CPI (Nov) + Real Earnings (Nov)
08:30 - Initial Jobless Claims
08:30 - Philly Fed Manufacturing (Dec)
08:30 - ECB press conference begins (adds FX noise, CPI still dominates ES)
High-impact window: The peak whip risk occurs from 08:30 to 08:45 ET. After the market opens at 09:30, it often either continues the 08:30 trend or reverses back to fair value.
October CPI Release and Its Implications
The absence of the October CPI data from the Bureau of Labor Statistics (BLS) introduces significant complexity to the upcoming November CPI release. Notably, the November figures will omit certain one-month percent changes due to the missing October data. This gap is likely to lead to increased volatility in market reactions, as traders may rely more heavily on year-over-year comparisons and overarching narratives. It's important to emphasize that this presents a data-quality risk rather than a straightforward price forecast.
Current projections from Reuters indicate a CPI rise of 0.3% month-over-month, with a year-over-year increase of 3.1%. Additionally, core CPI is expected to mirror this 0.3% monthly change, while the year-over-year core figure is anticipated to remain at 3.0%. These benchmarks represent the market's baseline, and any significant deviation—either a miss or beat—could trigger a pronounced market reaction.
Navigating Market Dynamics: A Practical Guide for E-mini S&P Traders
- Hot Scenario: A core CPI increase of 0.4% or more, or any unexpected data that raises inflation concerns, is likely to drive yields upward. In this case, E-mini S&P futures may see selling pressure on initial rebounds, as traders react to renewed inflation fears and test support levels.
- Cool Scenario: Conversely, if the core CPI prints at 0.2% or below, or if there’s a clear downside surprise against expectations, we might witness a drop in yields. This scenario could facilitate a breakout for E-mini S&P futures, allowing for upward progression through resistance levels as shorts are squeezed.
- In-Line Scenario: The market may react chaotically to the initial news, but typically, direction stabilizes upon the first pullback following the 09:30 cash market open.
To ensure effective trading during the CPI release, adhere to the following guidelines:
1. Avoid initiating new positions in the final 60 seconds leading up to the 08:30 release.
2. Establish four key reference points: the high and low of the pre-CPI trading range (08:20-08:29) and the high and low resulting from the CPI spike (08:30-08:33). These levels frequently serve as pivotal points for price action during the first 30 to 90 minutes of trading post-release.
By keeping these dynamics in mind, traders can better navigate the potentially tumultuous waters of the upcoming CPI announcement.
Market Analysis: Short-Term Outlook
In the broader context, the recent trading action suggests a failure to maintain momentum after reaching the upper resistance band. The most recent price structure indicates a downward trend, with the market currently trading below key resistance levels. For upcoming sessions, this is critical; any attempts at upward movement will need to overcome the 6821-6835 range to signify a genuine reversal rather than mere corrective action.
On the 4-hour timeframe, we observe a distinct sell-off followed by a consolidation phase. There are several resistance zones left untested from the recent decline, which could hinder any potential rallies. The immediate resistance is located between 6812 and 6821, with a higher barrier at 6835. Should the price exceed 6835, it might have the potential to rally toward the 6865-6882 range.
The 1-hour perspective reveals a classic pattern characterized by a sharp decline followed by a basing phase. Notably, trading volume surged during the sell-off before tapering as prices stabilized near the close. This dynamic sets the stage for either a rebound toward immediate resistance levels or a further decline if the established support fails.
The oscillator is currently in a deeply oversold position, registering in the low teens and beginning to show signs of a potential upward turn. This development suggests some bounce potential, although it does not guarantee a trend reversal on its own. A credible shift in trend will require the price to reclaim the R1 resistance and maintain levels above R2.
Overnight Market Outlook: NY Session Forecast
Base Case Scenario (Pre-CPI): Anticipate a period of rotational trading between support level S2 at 6775.50 and resistance range R1 at 6812-6821.
Bullish Scenario: Should the market hold at S2, a reclaim of R1 would be crucial. A successful transition of R2 (6835) from a resistance level to a support floor could propel prices toward R3 (6865-6871), with the potential to reach 6882.50 if bullish momentum remains strong.
Bearish Scenario: Conversely, if the market slips below S2 and fails to reclaim the 6775.50 level, we could see a decline towards S3 at 6762, with a further slide to 6733.50 if selling pressure intensifies.
A++ Setup 1 - Short Position (Rejection at Resistance Level 1)
Entry Criteria: Monitor the market for a minimum of 30 minutes. The ideal entry is between 6816.00 and 6821.00.
- Stop Loss (SL): 6838.00
- Take Profit (TP) Targets:
- TP1: 6775.50
- TP2: 6762.00
- TP3: 6733.50
**Invalidation Point:** The setup will be invalidated if price sustains above 6835.00.
A++ Setup 2 - Long Position (Continuation through Resistance Level 2)
Entry Criteria: Again, monitor for a duration of at least 30 minutes. The target entry range is between 6830.00 and 6836.00.
- Stop Loss (SL): 6818.50
- Take Profit (TP) Targets:
- TP1: 6871.25
- TP2: 6882.50
- TP3: 6936.25
Invalidation Point: The trade will be considered invalid if there is a decisive drop back below 6821.50 after the reclaim action.
Good Luck !!!
07:00 - Bank of England rate decision + statement
04:00 - Norges Bank rate decision (Norway)
08:15 - ECB policy statement release
08:30 - CPI (Nov) + Real Earnings (Nov)
08:30 - Initial Jobless Claims
08:30 - Philly Fed Manufacturing (Dec)
08:30 - ECB press conference begins (adds FX noise, CPI still dominates ES)
High-impact window: The peak whip risk occurs from 08:30 to 08:45 ET. After the market opens at 09:30, it often either continues the 08:30 trend or reverses back to fair value.
October CPI Release and Its Implications
The absence of the October CPI data from the Bureau of Labor Statistics (BLS) introduces significant complexity to the upcoming November CPI release. Notably, the November figures will omit certain one-month percent changes due to the missing October data. This gap is likely to lead to increased volatility in market reactions, as traders may rely more heavily on year-over-year comparisons and overarching narratives. It's important to emphasize that this presents a data-quality risk rather than a straightforward price forecast.
Current projections from Reuters indicate a CPI rise of 0.3% month-over-month, with a year-over-year increase of 3.1%. Additionally, core CPI is expected to mirror this 0.3% monthly change, while the year-over-year core figure is anticipated to remain at 3.0%. These benchmarks represent the market's baseline, and any significant deviation—either a miss or beat—could trigger a pronounced market reaction.
Navigating Market Dynamics: A Practical Guide for E-mini S&P Traders
- Hot Scenario: A core CPI increase of 0.4% or more, or any unexpected data that raises inflation concerns, is likely to drive yields upward. In this case, E-mini S&P futures may see selling pressure on initial rebounds, as traders react to renewed inflation fears and test support levels.
- Cool Scenario: Conversely, if the core CPI prints at 0.2% or below, or if there’s a clear downside surprise against expectations, we might witness a drop in yields. This scenario could facilitate a breakout for E-mini S&P futures, allowing for upward progression through resistance levels as shorts are squeezed.
- In-Line Scenario: The market may react chaotically to the initial news, but typically, direction stabilizes upon the first pullback following the 09:30 cash market open.
To ensure effective trading during the CPI release, adhere to the following guidelines:
1. Avoid initiating new positions in the final 60 seconds leading up to the 08:30 release.
2. Establish four key reference points: the high and low of the pre-CPI trading range (08:20-08:29) and the high and low resulting from the CPI spike (08:30-08:33). These levels frequently serve as pivotal points for price action during the first 30 to 90 minutes of trading post-release.
By keeping these dynamics in mind, traders can better navigate the potentially tumultuous waters of the upcoming CPI announcement.
Market Analysis: Short-Term Outlook
In the broader context, the recent trading action suggests a failure to maintain momentum after reaching the upper resistance band. The most recent price structure indicates a downward trend, with the market currently trading below key resistance levels. For upcoming sessions, this is critical; any attempts at upward movement will need to overcome the 6821-6835 range to signify a genuine reversal rather than mere corrective action.
On the 4-hour timeframe, we observe a distinct sell-off followed by a consolidation phase. There are several resistance zones left untested from the recent decline, which could hinder any potential rallies. The immediate resistance is located between 6812 and 6821, with a higher barrier at 6835. Should the price exceed 6835, it might have the potential to rally toward the 6865-6882 range.
The 1-hour perspective reveals a classic pattern characterized by a sharp decline followed by a basing phase. Notably, trading volume surged during the sell-off before tapering as prices stabilized near the close. This dynamic sets the stage for either a rebound toward immediate resistance levels or a further decline if the established support fails.
The oscillator is currently in a deeply oversold position, registering in the low teens and beginning to show signs of a potential upward turn. This development suggests some bounce potential, although it does not guarantee a trend reversal on its own. A credible shift in trend will require the price to reclaim the R1 resistance and maintain levels above R2.
Overnight Market Outlook: NY Session Forecast
Base Case Scenario (Pre-CPI): Anticipate a period of rotational trading between support level S2 at 6775.50 and resistance range R1 at 6812-6821.
Bullish Scenario: Should the market hold at S2, a reclaim of R1 would be crucial. A successful transition of R2 (6835) from a resistance level to a support floor could propel prices toward R3 (6865-6871), with the potential to reach 6882.50 if bullish momentum remains strong.
Bearish Scenario: Conversely, if the market slips below S2 and fails to reclaim the 6775.50 level, we could see a decline towards S3 at 6762, with a further slide to 6733.50 if selling pressure intensifies.
A++ Setup 1 - Short Position (Rejection at Resistance Level 1)
Entry Criteria: Monitor the market for a minimum of 30 minutes. The ideal entry is between 6816.00 and 6821.00.
- Stop Loss (SL): 6838.00
- Take Profit (TP) Targets:
- TP1: 6775.50
- TP2: 6762.00
- TP3: 6733.50
**Invalidation Point:** The setup will be invalidated if price sustains above 6835.00.
A++ Setup 2 - Long Position (Continuation through Resistance Level 2)
Entry Criteria: Again, monitor for a duration of at least 30 minutes. The target entry range is between 6830.00 and 6836.00.
- Stop Loss (SL): 6818.50
- Take Profit (TP) Targets:
- TP1: 6871.25
- TP2: 6882.50
- TP3: 6936.25
Invalidation Point: The trade will be considered invalid if there is a decisive drop back below 6821.50 after the reclaim action.
Good Luck !!!
If you want to contact me Email: info@algoindex.com or algoindex.com
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
If you want to contact me Email: info@algoindex.com or algoindex.com
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.