SPX S&P 500 2-Hour and Daily Charts; Falling Wedge; Oversold; Positive Divergence; Price Extended; US Stock Market Prints Low of the Year at 3492; PPI and CPI Inflation Drama Resolves with Record-Setting Turnaround Rally

The SPX 2-hour and daily charts want to rally but the negative news beat-down continues and the all-important inflation data is minutes away. Just in the last 2 days, to begin the week, the negative news includes doom and gloom from JPM CEO Dimon that calls for another -20% pullback and says the inflation data that is about to hit may be a disaster. Russian hackers attack the airline computers. The Ukraine War rages on. The Fed hawk talk continues. There may be a US rail strike next month. The IMF downgrades its global forecast. The BOE is making a mess of things across the pond. And there is more. It is all negativity, all the time, for the last 6 weeks straight. All the bulls left town.

The VST and ST charts above say up for stocks in the hourly and daily time frame from here but the inflation data may say otherwise. 

The 2-hour chart shows a double-bottom and the new matching and lower price low, the low for the year of the US stock market at SPX 3568.45, comes with possie d across all indicators so she is fueled up and ready to launch. What say you inflation data?

The ADX on the daily chart shows that the strong trend up in the summer was lost, and now the strong trend down appears to be diminishing. The Aroon shows the bears at maximum bearishness and the bulls at maximum bearishness. The boat is fully loaded on the bear side so you know what usually happens next.

The very short term and short-term charts say up for stocks but here is the inflation data dropping now. The 200-week MA at 3599 is key S/R (support/resistance) going forward. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

Note Added 8:32 AM EST: The PPI comes in hotter than expected at +8.5% above the +8.4% estimate. Inflation remains a huge part of the American economy. S&P futures are +8 retreating from +27 before the data but remain on the positive side, call it flat. 10-year yield 3.96%. USD 113.40. So far, it looks like the bulls have a chance today. It is set up on a silver platter for the horned ones.

Note Added 8:44 AM EST: S&P futures +15. VIX 33.70 trading flat. The SPX begins trading in 45 minutes at 3589; this is 10 points below the critical 200-wk MA at 3599.

Note Added 9:35 AM EST: Stocks stumble out of the gate like a drunk in Times Square. The SPX is down 10 points to 3579 now 20 points below the 200-wk MA. The 2-hour and daily SPX charts remain as shown above ready to rock and roll higher. Will the Fed keep their mouths shut today or lip off about more rate hikes?.

Note Added 9:40 AM EST: Boomerang. Stocks turn around and pop higher, no doubt receiving some of the possie d love. The SPX is up 10 points to 3599. Boom. This is the first test of the 200-wk MA at 3599 resistance. Price may retreat but it will attack 3599 again. Bulls will likely run hard, and the possie d will kick in, if the SPX starts moving above 3600. VIX 33.96.

Note Added 9:44 AM EST: She's testing again.... 3599....... what is the verdict? Price must bounce or die from the 3599 S/R.

Note Added 9:45 AM EST: Pop. SPX 3606+. Will the bulls take advantage of being handed the silver platter today? Here's the back kiss back down to SPX 3599........it is bounce or die time again. Bulls and bears wrestle each other falling back and forth across the 3599 line in the sand. Comically, the ink is not yet dry on the PPI print this morning, but analysts and television talking heads are already touting the CPI on tap tomorrow morning as the most important data point. CPI is the new shiny object. Humans have short attention spans in this new technological age.

Note Added 9:53 AM EST: SPX 3599. The battle rages on..... but the bulls have positive divergence on their side. The bears hope for more negative news and Fed talk..

Note Added Thursday Morning, 10/13/22, at 7:00 AM EST: Happy Birthday to the US Navy. What happened yesterday? Stocks are on the launchpad fueled-up with possie d? The Fed Minutes create sogginess as well as more Fed talk. Kashkari, that used to be a dove, is flapping his hawkish wings sending stocks lower. Interestingly, the non-stop Fed chatter must be priced into markets since the SPX finishes only 10 points lower, call it flat, at 3577. The 200-week MA resistance remains at 3599 the critical bull/bear line in the sand. The low of the year holds from Tuesday at 3568.45. It would be a big negative for stocks if the 3568 fails. As mentioned above, the CPI is the big show at 8:30 AM EST so traders decide to wait a few more hours to get the number, which is backward looking, and react accordingly. PPI was a touch hot (higher than expected) so the consumer inflation is expected to come in hot as well. The SPX 2-hour and daily charts have not changed. They remain set up with positive divergence on the launchpad waiting for the spark. Is the fuse going to be lit in 90 minutes? Even if the CPI data sends futures and stocks south, the charts will set up the same as above in a few hours or day or so after the new news is priced-in. Stocks have wanted to rally for the last few weeks but are continually kept down on the non-stop negative news and Fed threats of more hikes. It is like keeping a a beachball underwater. The bulls are due to have their day. The SPX weekly chart is also set up with possie d so if the CPI behaves itself, the US stock market is set up for a multi-week rally going forward. The caveat is the negative news flow or tragedy such as dirtbag Dictator Putin dropping a nuke. Technically, the stock market wants to run higher.

Note Added Thursday Morning, 10/13/22, at 8:15 AM EST: S&P futures are ramping higher all morning long +36. VIX 33.16. The die will be cast in 15 minutes. What say you CPI?

Note Added Thursday Morning, 10/13/22, at 8:40 AM EST: CPI comes in hotter than expected month on month at 8.2% on an annual basis. Traders panic that the Fed will have to raise rates more aggressively. Stocks tank. S&P futures go from +40 to -80 in a heartbeat a -120 point drop. S&P futures are now down -65. USD 113.70. 10-year yield 4.00%. Interestingly, the VIX drops to 33.10; it should be skyrocketing higher. It is more of the same-o, same-o. Today will be interesting to see if the negativity holds. Gasoline prices are actually down. Ditto apparel and used cars. But new cars add to inflation so does, food, rents, shelter, natty gas, electric, airline tickets, medical care and insurances. Services inflation runs higher. The rich still have plenty of money to spend since they took it all over the last 5 decades. Inventories build and markdowns are required for apparel but it is not enough to pull the overall inflation numbers lower. Keybot the Quant remains short for the last 4 weeks. CNBC television personality Jim Cramer mocks anyone that went long any stocks.

Note Added Friday Morning, 10/14/22, at 3:00 AM EST: There ya go. It is always darkest before the light. The SPX prints a near +5% turnaround off the lows yesterday morning. The SPX finishes Thursday up 93 points, +2.6%, to 3670. The 200-week MA at 3599 is in the rearview mirror so the bounce wins the duel at the critical 3599 S/R pivot. A new low is placed for the year at SPX 3491.58 so write that on a sticky note and put it on your computer. Cramer was a fade. Vol told the story. There was panic in the morning but volatility actually dropped which made no sense (the SPX and VIX move inverse to each other over 90% of the time). Stocks are 'going up, going down, going up, down, down, up, anyway you want to make it roll', as Jimmy Reed would sing. Now you can see, the power of possie d, overtaking the news negativity. Keystone is a poet and he knows it.