Jan 12, ES Premarket Short Note: PPI
Decision maker
Image 1. Tightrope trading
Aside from the expected volatility premarket on CPI, the day was uneventful from the perspective of the prior day. We did form an outside day with four distributions signaling indecision on price, ultimately closing a notch above POC. Remember, time is the moderator in markets and price the advertisement, so the longer we spend above 4800 the more these prices will be accepted.
Image 2. Thursday ETH, RTH and Friday ETH sessions as of 8h20EST
Minister’s Missal
I was wrong on CPI as the core stay the same and month on month a little hotter. Personally I thought the numbers would show cooler and be adjusted later (we have a record of this) but that’s maybe the cynic in me. Regardless the market shrugged this off.
I will not be changing the plan for today as levels remain consistent. I will adjust the pivot to 4813, not only an older level of importance but Thursday POC. As of writing the ETH session continues to balance well within the prior day VA although there is some selling seen on the tape. All this will be irrelevant on the actual PPI print so I am not reading into it at this time.
Friday Plan and Levels
Pivot 4813. Bears want to see a defense of the ONH and a break of the PDL. Meanwhile bulls want to maintain above 4790 (Thursday VAL), which can set up a test of ETH high 4841.
a) A, early defense of 4790 after the CPI release with no hourly close below targets the ONH. A break above PDH can go on to see 4841, however sellers may be found at 4830. Further above are 4857, 4870, and 4890.
b) Sellers defending the ONH want to see pressure under the pivot for a shot at 4785-90, where bids may be encountered. An hourly close below can lead to a test of the PDL 4772, with further targets 4760 and 4744.
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