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Good morning friends and TGIF!
A few quick important notes....Earnings season kicks off today with financials leading the way. JPM, C, BAC, WFC all reporting this morning. Also, please note Monday the 15th is a holiday and the Markets will be closed for Martin Luther King Jr. Day! As such, there will be no Morning Color on Monday and will resume as normal on Tuesday January 16th!
Now back to business.......The CPI did not disappoint as there was some tremendous intraday volatility yesterday morning when the numbers came out. Inflation according to the CPI print came in a bit hotter than expected and futures took some serious moves both higher and lower. The target areas were hit, both upper and lower, and this does not happen every day! It usually only happens in times of heightened volatility! We have another one this morning with PPI at 8:30 AM EST.
For now, please look at the profile picture below.....we are now in a very large area of balance and it is now a bit tricky to determine the next big market move either higher or lower. I would say the probabilities for both stand at 50/50...meaning take out a quarter and flip it....that is where we stand at the current moment so don't fight it and don't get disappointed if the market stays in range and just chops around! Hint...look at the yellow areas....overlapping!!!
Futures are lower this morning with overnight inventory almost 100% net short and we are inside prior days trading range almost right at 1/2 back which is 4802.50 in /ES and 16,898.50 in /NQ. This tells us the market is in "balance" and as noted, a red star event PPI @ 8:30 AM EST!!!
/ES upside target is: 4840-45
downside target is: 4790-85
/NQ upside target is: 17,060-065
downside target is: 16,840-830
/RTY upside target is: 1985-87
downside target is 1942-40
Economic Data Today:
*PAY ATTENTION - RED STAR EVENT AHEAD
PPI (Producer Price Index) @ 8:30 AM EST ** Red Star Event
Baker Hughes Rig Count @ 1:00 PM EST
More Color.......
/ES - Bounced from Demand at $4800-4805 with supply above at $4840-$4830 . If price
can hold above with a pull back at the open I will look to play long for a new HOD.
Below $4800 can leave more room to the downside with Demand at $4770
SPY - Key Level for me today will be $471-72 Demand from this week with Supply
above at $478-479. If buyers at the open get trapped with no follow through past $479 I
will look to play short if price can hold below Supply on a pullback after a break out.
- Sellers at the open trapped if Bulls can defend $475 playing long target $478
- Sell off at the open with price holding demand playing a bounce long at $472
SPX - Consolidating inside supply at $4800-$4790 with demand at $4770-65 then
below that at $4740-4750, below that can leave us room for more downside. Key levels
for me today are Demand where i want to see if it flips back to Supply
/NQ - New HOD inside supply at $17060-17040 then below that at $16980-60. Demand
below that is at $16915 -30 , after the previous demand was $16760-16780
QQQ - Consolidation under supply at $410-411 with Demand below at $405 -406 . If
buyers can defend after a sell off I will look to play long or holds above pre market low
TSLA - Gap down over night with new LOD , If price can pull back and hold below
$228 I will look to play short targeting a new LOD . Only way I can play long is above
NVDA - Supply flipped to Demand at $545, if price can hold above $543 on a pull
back I will indicate Bullish scenario , price below $534-535
Have a great trading day and a fantastic weekend.
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