S&P 500 was pummeled on hotter CPI, and if oil (gasoline, diesel) keeps grinding higher over the next four weeks, that would result in rate cuts being deferred even more than Marrch one with around 8% odds. Forget not about Apr when I expect BoJ to start moving towards policy normalization, and that would work to underpin the present yields move higher, covered extensively on Monday, and also help the dollar swing upwards.

Not many events are ahead today – Goolsbee and Barr speaking, a bunch of oil related data, and of course short-dated Treasuries auction. Following yesterday‘s quick intraday gains on the short ES side, today‘s calls probably till unemployment claims tomorrow, would go for gradual retracement of yesterday‘s decline – 5,005 is the first serious resistance, and overcoming 5,024 would then firmly return the initiative to the bulls. Nasdaq isn‘t to disappoint either – to the contrary.

My thesis of shaking off rate cuts disappointments, and striving to push higher again nonetheless, is still on – and this week provides a good chance for that. Till PPI, which is what is likely to bring a similar yet less pronounced gyration as CPI did.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).
 

S&P 500 and Nasdaq Outlook

Late day race creating long lower knot favors the buyers for today, no matter the action during the early part of the regular session. Tech is better positioned than Russell 2000 to shake off the change in rate cuts path, but look for no steep upswing overcoming 17,840 in Nasdaq futures before EST noon. Still, semiconductors performance yesterday bodes well for MSFT, AAPL and NVDA over the next 24hrs. The bulls would sure go buying the dip – the upswing isn‘t yet exhausted.
 

Crude Oil

Crude oil keeps rejecting not just downswing, but also a comparatively shallow correction – the table is set for a slow grind higher into Friday.

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