Market Top on CPI News - Santa might not come this year
The price action of 2022 has been dominated by inflation related news. The start of the recent rally began with the October CPI print where an expected 8.3% came in at an actual 8.2%. This was a slight change but the first sign that inflation may have peaked and thus the Fed might pivot from their interest rate hikes. The market has loathed higher interest rates all year.
Even if one did not know the details of the news the action of price was enough to see the signal of a rally. Price performed a false breakout to the downside (A Bullish Spike) seen on that October 13th Daily bar that kissed the 50% Retracement of the entire COVID Rally as seen on the Weekly chart below:
This week yet another CPI news event triggered a Bearish Spike at the 50% of entire bear move from the ATH down to that October low. This in itself is a sign that the market will be bearish through the end of the year and into 2023.
Additionally, the inverse relationship of the VIX
VIX gives another clue that the market has turned. VIX for the third time this year has made a turn at the key Support of 20 which in both March and August signaled the highs for that period:
I would like to believe in the Santa Claus rally for 2022 but the technical signs point to coal in equity stockings...
Even if one did not know the details of the news the action of price was enough to see the signal of a rally. Price performed a false breakout to the downside (A Bullish Spike) seen on that October 13th Daily bar that kissed the 50% Retracement of the entire COVID Rally as seen on the Weekly chart below:
This week yet another CPI news event triggered a Bearish Spike at the 50% of entire bear move from the ATH down to that October low. This in itself is a sign that the market will be bearish through the end of the year and into 2023.
Additionally, the inverse relationship of the VIX
VIX gives another clue that the market has turned. VIX for the third time this year has made a turn at the key Support of 20 which in both March and August signaled the highs for that period:I would like to believe in the Santa Claus rally for 2022 but the technical signs point to coal in equity stockings...
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Youtube: youtube.com/c/NoroksNotepad
Twitter: twitter.com/noroktrade
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