When US markets opened after Labor Day, WTIC started to better reflect the actual Middle East escalation – it didn't happen during the premarket session, but in the run-up to the opening bell. Early buyers were overpowered, and stocks (incl. the leading tech, which was my focus for longs) did slide to a major support level around QQQ 717, which was the final and successful long intraday entry in tech, allowing clients to recoup prior smaller whipsaws, walking off in a fine daily position overall.
More kinetic action then marked a bearish turning point once again before the closing bell – and yet again, Asian and European sessions didn‘t reflect that; VIX didn‘t reflect that – but oil did.
Tech lower timeframes (e.g. 5min) were showing a rounded top structure where it made most sense for buyers to wait for price behaviour around said 707 area – and it was cut through like a hot knife through butter as early morning, and remains below this level still.
Is that also part of the positioning for upcoming inflation data?
As talked yesterday with clients, I look for rather hot inflation data – first we get PPI, and there‘s little to make me think it would be tame, actually this will be a hotter figure than CPI itself – maybe the state of the consumer as seen in XLY, XRT and other sectors doesn‘t paint a picture of economy being able to accept high oil prices art the retail level, which makes both inflation readings to come spooky, each in itw own right.
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