S&P 500 reversed mid-session, but it would be premature to call for the end of the correction – odds are that following today‘s rebound, which I saw as likely to stall in the 4,535 area as easy gains from rotation into beaten-down sectors are made, and those defensives with energy won‘t be as generous today.

For now, stocks will try to position optimistically for low CPI (below 3.3% or better yet below 3.2%), and the degree to which they would be able to peek above 4,535 would provide a hint as much as real assets, yields, and the dollar.

I‘m looking for modest traces of optimism that would be reversed tomorrow as CPI comes hotter than expected, catching markets off guard – and boosting Fed raising bets correspondingly.

More stock market sectoral and other analysis can be found in the chart section.

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

Gold, Silver, and Miners

Gold is still grinding lower, and may reach a good few bucks below yesterday‘s lows while waiting for CPI – all that‘s needed is a bit of rising yields again, which is e.g. on 10y doable (above 4.10% again). Silver together with copper are to face greater pressure than gold before the announcement while oil gets least challenged even in the aftermath. Energy is making a comeback, and natgas is also likely to extend gains – good seasonality is here.
 

Crude Oil

Crude oil didn‘t proceed to building a bull flag – does it seek to make a running correction where prices only temporarily retreat? Volume behind buyers following every decline is suggesting that – but I would still look for a quick and relatively shallow pullback into tomorrow‘s CPI – then the upswing can continue as the tightening dust is likeliest to settle down here first.

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