The E-mini S&P 500 fell by about 0.4% towards $3984 in the European trading session. The market is boosted by the lower-than-expected inflation data which raises the probability of a slowdown of the interest rate hike’s pace.

• Odds are higher for a 50 bps rate hike from December, giving a bullish factor for the equities market.
• Earnings of retail firms are monitored by investors such as Walmart this week.

The daily interval rose two consecutive days in a row, targeting the Yearly developing VWAP, and is bullish imbalanced due to the mentioned inflation report and possible effects on the monetary policy which weakened the dollar to support commodities while the surges in the prices might add to the inflationary pressure in the median-term perspective again.

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The hourly perspective is balanced and traders lean on the value extreme with bearish calculations and a strong dollar. However, the VIX is positive with about 7% in the plus, giving the market reasons for a potential rotational behavior. Core sellers might add to their position around the developing VWAP as the hourly interval signals selling tails. The secondary possible entry level for short positions might be the upper-value extreme or standard deviation level. Swing highs and lows might be targeted for absorption of the inventory to open larger core positions as a micro-balanced behavior might conclude layering.

3 Months Ago

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Asset managers were covering shorts of about 49.205 contracts of the E-mini S&P 500, options, and Futures combined, increasing the net long hold positions. We can observe long liquidations in the COT report as of 1st November data, giving the market a potential rotational approach for the institutional sector. Yesterday’s Put/Call options open interest ratio more likely pointing to the downside where the inventory sits.

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