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Making a fine run, S&P 500 retreated from a vulnerable level of 3,865, but the bulls didn‘t give up totally since. Still, this tough 3,848 – 3,855 resistance held, the breakout was rejected, and another attempt has to wait for the CPI aftermath. One good argument for a lackluster session today is the likely (dead cat) bounce in the dollar as the correction hasn‘t played out yet after yet another day deep in the red, which would coincide with a slight move higher in yields exerting pressure namely on tech. In short, stock bulls would be on the defensive today, and unlikely to make solid and lasting progress.

Just as I have written yesterday, 3,815 has to hold as support while already 3,845 would be biting today should the buyers make it that far in the first place, and:

(…) 3,848 – 3,855 represents solid resistance that can be reasonably overcome only on a sharp risk-on turn in bonds … – still, the medium-term trend is up, and it‘s only a matter of time (more likely facilitated by Thursday‘s CPI confirming the notion of inflation peak being in, than midterms) before this level gets broken to the upside.

Note that stocks are unable to get much support from retreating oil prices (WTIC moved from $93 to $88), and natgas is below $6. Even the highly encouraging precious metals run on increasing volume is undergoing a (healthy, must be stated, healthy) correction today, but the winds of change are blowing, with especially silver being a winning proposition. Copper continues confirming the breakout attempt from the monthslong consolidation with decreasing sensitivity to the rate hikes. And here we are, late in the tightening cycle, with CPI tomorrow likely to feed into Dec 50bp angle, helping crude oil to return above $90 and USD remaining on the defensive though not as badly as cryptos where the dust isn‘t settled yet.

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