High inflation report leads to whirlwind price action
CPI data was announced this morning and the market did not like it. At 7.5%, it was the highest report since February of 1982. Things sold off quickly and kept heading lower before bouncing at the open. $IWM was the first to go green. Then $DIA did as well. $SPY made it into positive territory for a very brief moment but $QQQ never did.
Eyes were on the major indexes especially as the ability to go green and stay there in the face of the CPI data would’ve seemed very bullish.
The price action now is similar to last Thursday. This time it concerns me a little more. $IWM went back into the range only to get rejected quickly. This isn’t exactly the same as a failed breakout. But it does look like a failed move. That’s not particularly encouraging. $SPY and $QQQ both got rejected at the highs from last Wednesday. Now they’re both below their 8/21 emas. Again, this could end up being just more consolidation in the range. But it doesn’t look like bullish action to me.
The afternoon selloff is being credited to “whispers” that the Fed may do an emergency rate hike as soon as tomorrow. Who knows? It really doesn’t matter why. We know only price pays.
So let’s keep an eye on the charts. Know your levels and your exit plans. Be ready for anything.
These charts of $SPY and $QQQ below show some levels I’ll be watching.
***This is NOT financial advice. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.