10:16 am EDT:  The ES opened in today’s value area and could not push through.  As expected, it has now reached the lower end of the projected range of 1132.25 to 1133.75.  The speed of descent makes longs aggressive.  If the ES trades back up to day-session-only S2 at 1136.75 and sells off, then there could be more downside to go, the next target being the high volume level at 1128.75.

The Precise Take – Equities flat on CPI, but leaders are warning the bulls

Leaders Analysis:   30 Year T-Bond futures reversed up yesterday and are up nominally overnight.  The US Dollar has reversed upwards and is up materially, and the EuroYen is down materially, having broken strong support.  All in all, the leaders are equities bearish.

Medium Term Analysis:  As we write, CPI came in within expectations and the ES is relatively flat.  With that report behind, the ES has the opportunity to rally into Monday (a US holiday) as long as there is not a downward surprise in Consumer Sentiment today at 9:55 am.  However, the leaders’ bearish stance warrants caution for longs and suggests that any new highs today will be nominal.

Trading Today:  Longs will want to push through today’s value area early, which is from 1143.0 0 to 1145.25, to have a chance at the upper end of the projected range of 1151.00 to 1151.25 (weekly R1 and day-session-only R2).  Otherwise, a run to…

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