S&P500 Holy Crow Missal: July 16
Embourboned
Image 1. Bourbon. Trust me, you’ll need it
The clown cover image on Tuesday’s Missal summed up perfectly what I thought about the CPI stats after release. Flat per expectations, but core down, but up yoy. Total nonsense! But the birdbrains ate it up - at least until the open. I think we have a very good open-reverse tape lesson coming soon…
For those who haven’t noticed, Trump 2.0 is emboldened following the passage of the Big Beautiful Bill, slapping Europe on the ass with tariffs at 30%. TACO that! Powerful Europe has amassed their top brass to pen an appropriate retaliation, targeting Trump 2.0’s favorite letter - the ‘B’, and what could be as American as Bourbon (the drink) and Boeing!
Both guaranteed to send you flying out the door with overuse.
Reverend Bird’s Missal
Yesterday’s plan was all about the trading the gap, where I wrote “Acceptance within the prior day value… [targets] the prior day POC, VAL, and… daily low.”
That’s what played out, speaking to a lot of weakness on a data salad of a CPI release. Participants have PPI to look forward to today (which came in at 0.00% vs 0.02% expected. Not wort the paper it’s printed on). The overnight as of writing has shown initial weakness testing near the lows of balance (gasp) which could be a hint of things to come.
Recall that mid to end July can see cyclical weakness.
Image 2. ES ETH and RTH profiles as of 8h15EST
I won’t change the plan much here. Bulls must hold the line at 6300, targeting momentum over 6330 for major target 6350 above, followed by 6357 - a zone where longer-term sellers may be encountered. Sellers look for momentum below the prior day low, targeting overnight and further balance low. That can precipitate a break of balance to the downside.
Image 3. ES 1h chart and structural levels
As a note, I wrote the plan and levels at 6h00EST. I didn’t make any edits after the PPI release, proving that data should not *really* impact your trading plan all that much.
Crow’s Nest: Wednesday July 16
Day pivot 6290 - Below weekly pivot 6276 leans short, above 6308 long. This could very well be a sell-the-news type of day.
a) Reclaim of 6300 (close above), momentum over 6308 targets 6315, 6325 - a zone of further seller defense. Above that targets 6337 and 6349-57.
b) Time below pivot and momentum below 6265 targets ONL / 6255, poor low 6246. Buyers may support here but further weakness looks to 6233-35 and 6225 at an extreme.
c) VIX pivot 17.75. Possible continued selling above 18.00 while buying may be supported below 17.25.
Keep it simple, and don’t be a birdbrain!
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