We got a pullback yesterday, which was very close to hitting the 23.6% retracement level, and then we reversed back up hard into the close to erase it all. Is that the low? We'll see today after the CPI most likely the answer to that question. If it's viewed good the market will squeeze hard and probably challenge, if not take out the current high.
If viewed poorly then we pullback again for another retest of yesterdays low with decent odds of a slightly lower low being put in. That would end up being an ABC pullback for some degree of a wave 2 down, which I think would be an Extra Tiny Wave 2 inside Tiny Wave 5 up to complete Small Wave 5, inside Medium Wave 5, inside Large Wave 3 up. Just a "best guess" as always on the wave count. Below is what I'm talking about...
As you can see on that chart the market could pullback again and still be in a strong bullish uptrend, or just go up with the low being in from Tuesday. The CPI is just another "event" that can cause it to move strongly either way. I don't know which way it's going but I have to think that the most damage would be to go up more and not give the trapped bears any more of a pullback to exit at or get long. Going down to the "possible" FP of 583 on the SPY is likely just wishful thinking by me and anyone that is bearish.
It could happen but that's about a 50% pullback of the Extra Tiny Wave 1 up, and that just seem too much in my opinion... and least if you want to see the blow off happen into the end of this month. I don't know if it can make it that high or not (I mean my FET of 6435) with such a small amount of time left, but crazier things have happened.
Besides the CPI today we have the Jobless Claims on Thursday and PPI, as well as Powell speaking at 3pm EST (to lie of course about the economy), and then Friday we have Retail Sales, so that's a ton of "events" that can be used to juice the market higher. If they do then next week can just go sideways to hold the gains from this week, which leaves the last week of the month to float higher
Have a blessed day.
