WOW! What a crazy day yesterday (and Monday). I had hoped that the market would rally up into the CPI and then tank after it, but Mr. Market threw a curve ball yesterday with that fast midday drop. When it happened I posted on Twitter that I thought the correction was canceled for now as it appeared that we would be going into the CPI with a low, but then late in the day the drop reversed right back up to close about flat.
That rally still did not take out the FP on the QQQ at 444.17, so we didn't close at a high going into the CPI either. Therefore anything is possible... meaning the correction is still on the table as all we need to do is to have a rally up through the FP to run the stops on the bears, and then we can still reverse back down later in the day to start the correction.
The market was very sneaky yesterday as if it would have closed down at the low I do think the correction would have been canceled (for now at least), but it's still open now and can happen. I expect to see a lot of wild swings up and down today as the prior CPI had like 4 or 5 big moves if I recall. I mean we could drop 50 points in a flash and go back up 50 points above the flat line (the spot the market is at prior to the CPI). That's a 100 point swing in total, and it could happen several times today before picking the real direction.
I still lean down as the charts tell me the market is tired and will have a correction start soon. I covered them all on Mondays post and nothing has really changed since then. But I also think that we will first go up to take out the stops on the bears, and then go down with the bulls trapped long.
How high is something I just don't know? It should be a lower high, which might be by just a few points? But technically I think it should stop around the 5308 high from 4/4... meaning it might pierce through it a few points but is more likely to stay under it. I would love to see it taken out a little and get really close to the all time high as that would scare the bears out and suck in the bulls... "the ultimate trap".
My plan is to get a short but it must be up around that 5300+ zone before I will risk it. Then I'll take my chances to see if the correction happens or not.
Have a blessed day.
