TLDR: I personally think we’ll have a dump incoming soon, but right now, it’s pretty 50/50. We’ll see how CPI makes markets go and looking at the CPI Thread, seems like we should get a dump incoming for the days preceeding CPI. I think inflation has peaked but we’ll see.
On the hourly, SPY seems like it’s in a triangle. We’ll see which way it breaks out, but I’m leaning towards to the upside honestly. RSI has bounced off the 50 range multiple times this consolidation and MACD has bounced off the 0 line the last couple times. Based on this and where we are right now, I think we go up a little more. Another reason why I think up is because we broke below the 8/21 EMA and now back up above. We’ll see though.
On the daily, we’re just in a consolidation range and bouncing off the 8 EMA. The RSI is looking strong although the momentum is starting to fade. We’ll see if we form a bearish divergence on the RSI if we go higher. Overall, just looks like the same shit we saw at the beginning of June and I think CPI will make us break out of this range.
On the weekly, SPY is looking strong. But we are at the 50 line on the RSI and this is around the level where we turned around last time and if we are in a bear market, we should turn down here again and stay below the 50 level. MACD is showing bullish momentum which is good and although it’s not on here, SPY is above the 21 EMA which is huge. But we have to continue to stay above and not have a fake breakout like in March. One thing I’m looking at is if this is just a bear market rally. If we continue to go up, I want to see how SPY acts around the weekly 50 MA. If we get rejected straight away, I think that we’re not going to make new highs and continue to make new lows. If we break the 50 MA, I think that we’re going to make new highs before heading into a crash.
So VIX looks like it broke the long term trendline that has stood strong for a while now. We’ll see if it continues to trend lower, but it’s in a downtrends wedge which is bullish and primed for a breakout. I personally think volatility will return to the markets soon, but we’ll see when. VIX is showing that we should get more downside soon though.
So the 10 year yields looks like it’s starting to trend back up. Will this put more pressure on stocks and cause another leg down or is this just a random green day. Right now, seems like the 10 year is trying to go back into an uptrend.
The inversion is becoming more inverted, which could mean that more volatility is incoming and in my previous update, this is around the time of the inversion where markets go down hard before coming back up. We’ll see if this happens again and we get a good leg lower.
So the dollar went up which is bearish for stocks. So far, it seems like the dollar and the 10 year yields are starting to go back into an uptrend which should theoretically put pressure on stocks to go into a downtrend.
Now PCC is pointing towards a top too. We’re at levels where tops have formed before during this year. Will this mark the top again? We’ll see.
Now looking at the stocks above the 50 day moving average, we are also at levels where we start to pullback in the markets. So we’ll see how accurate these signals are.
Overall, it does seem like every indicator is pointing towards bearish. We’ll see if it plays out and how it plays out. Maybe we go hit 416 and then form a big bearish divergence to go down. Because most of my signals are pointing towards bearish, I think it’s a good r/r for puts or shorts, but we are in an uptrend so it’s better to make sure we are in a downtrend before going against the trend. I personally think that inflation has peaked, whether that’ll show in this CPI report will remain to be seen though. If CPI has peaked and does show, it should make markets go dicks up a fuck ton, although that’s going against the signals rn calling for a pretty big downside. Maybe these next 2 days we get huge red days, get a green day on CPI and a couple green the next few days before heading down lower. We’ll see, but leading into CPI, I’m leaning towards some green hourly candles before we start to go down hard.