what this CPI print means for markets

Hey traders.

Your favorite futures analysts are back in your inbox with another juicy market brief.

In this fine Tuesday report we breakdown what the latest “mega-bullish” CPI print means for markets, and the levels we’ll be trading.

Let’s get into it…

Impact Snapshot

  • October CPI shows inflation easing by more than expected

Market Evaluation

The consumer price index was flat in October from the previous month but increased 3.2% from a year ago. 

Both were below Wall Street estimates, sparking a major rally on Wall Street.

This is providing a hopeful sign that stubbornly high prices are easing their grip on the U.S. economy and giving a potential green light to the Federal Reserve to stop raising interest rates.

The drop in inflation suggests that recent monetary policy has been doing its job and make the prospect of a soft landing ever more likely.

Stocks climbed while bond yields sank with the S&P500 seeing one of the most impressive rallies of the recent months reaching up to 2%.

We always mention the relation of the yields and U.S. dollar with the stock market and today we could visualize that in the chart bellow

Markets Breakdown

Monday was relatively uneventful with no major economical reports and price just ranged within the last Friday’s range.

We’ve had an upside extension towards 4436 with the market closing around the same levels of Friday.

Sellers of the overnight session failed to find meaningful continuation to re-test the 4400s and buyers managed to bring the prices back above and fill up the gap left on the overnight the Friday’s highs. 

Today, the reading of the CPI report send the markets on an impressive rally that started from the overnight session and continued well above the major gap.

On our market update on Sunday over on X, we highlighted the continuation for the market after successfully holding above 4400s which would find acceptance into the higher volume clusters after taking out the gap.

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On our market update videos we’ve talked about the importance of this gap we’ve just broke out from for the duration of the whole month. We are now accepted on the lower side of the distribution above. We will monitor markets ability to hold above 4500s and take out this next gap that was left on 9/15 

The targets we look for until NY close & Targets to pay attention Tomorrow:

  • Upside Levels: 4528/4554/4601

  • Downside Levels: 4481/4437/4417

That’s all we got.

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See you on Thursday!

-The QuantVue Team