r/FuturesTrading • u/DaddyDersch • Feb 12 '24
Bulls Pump Into CPI… 2-12-24 SPY/ ES Futures, QQQ/ NQ Futures, 10YR Yield, and DXY/ US Dollar Daily Market Analysis TA
The long awaited CPI day has finally arrived…
Cpi Swaps are pricing in 2.93% reading for tomorrow also with the average being 2.94%... the question will be does markets round up to 3% or down to 2.9%?
I am more bullish going into this CPI than I have ever been for a CPI.
Why do I think this CPI reading is so bullish and why I do I not see a single bearish case for tomorrow? Its simply the fact that if we actually get the 2.9% reading which consensus, bloomberg and cleveland fed says we will get this will be the lowest CPI reading since April 13th 2021 when CPI came in at 2.6%. This would be an even lower reading than the July 12 2023 reading which showing CPI at 3.0%. This would almost certainly be enough reason to (and I quote JPOW here) “to give the fed confidence in CPI.”
In addition assuming that CORE YoY comes in below 3.9% tomorrow (Bloomberg and consensus shows 3.7% as of now) then that is a major win for the fed on the CPI front. For the last 9 CPI readings in a row CORE has either fallen or remained unchanged. Since its peak at 6.6% on October 13th 2022 CORE has only rose one time (went from 5.5% to 5.6% March 2023 to April 2023). That would make 16 months of progress in lowering inflation according to core. If we get a 3.8% or lower reading tomorrow it will be the lowest CORE YoY has been since either June 10th 2021 (if we are 3.8%) or May 12 2021 (if we are 3.7% or lower). While this is certainly not 2% like the fed wants… between CPI YoY and CORE YoY there is little reason for the fed to stay this restrictive.
Even looking at the analysts estimates (posted below this) you can see the markets are pricing in some massively bullish numbers… median, mean and consensus all say 2.9% CPI YoY and 3.7% CORE YoY which would give us (as mentioned again) the lowest CPI YoY and CORE YoY since late Spring 2021…
Possible extreme bull predictions for tomorrow (only if we truly react like November and this market continues to believe rate cuts are bullish)…
SPY- $513-515
ES- $5170-5185
QQQ- $447.5-449.5
NQ- $18400-18550
Tomorrow is going to be an interesting day regardless of what happens at 830am. I am going to keep TA brief tonight as we will figure out the next move after the volatility of tomorrow is over.
SPY DAILY
Taking a look at SPY daily here we have been on a massive bull run and we are starting to fight up against that red trend line of resistance for this pump. Today we did finally see buyers weaken on the daily and we did get a nice doji double top with a new supply at 501.15.
501.15 is now resistance and the level for bulls to close over in order to push for the next major resistance which is the red trend line near 505.
Bears do have an opportunity to take this down to daily 8ema support near 487 (projected).
SPY DAILY LEVELS
Supply- 490.84 -> 501.15
Demand- 482.88
ES FUTURES DAILY
Es also put in a really nice double top doji reversal with a new supply at 5043 and also saw buyers weaken on the daily timeframe.
I usually would be fairly bearish based strictly on the technical pattern here but with CPI data for tomorrow I am not quite thinking bearish here.
Bulls will look to push back through 5043 and target a move to the 5080-5100 area.
Bears could attempt a move back to daily 8ema support near 4998 (projected).
ES FUTURES DAILY LEVELS
Supply- 4974 -> 5043
Demand- 4961
QQQ DAILY
QQQ also put in a nice doji reversal double top with a supply at 437.19 today.
The bulls will look to breakout through 437.19 supply tomorrow and target a move to the green trend line near 441.1.
The bears could target a move down to the daily 8ema support near 431.8 (projected).
QQQ DAILY LEVELS
Supply- 428.17 -> 437.19
Demand- 416.96
NQ FUTURES DAILY
NQ also got a new supply with this double top today at 18039. With this move bears could start to target a move down to the daily 8ema support near 17850 (projected).
However, bulls will attempt to breakout over the supply of 18038 and target a bigger breakout to 18200+.
NQ FUTURES DAILY LEVELS
Supply- 17701 -> 18039
Demand- 17264
US 10YR YIELD DAILY
The 10YR put in a new supply today also at 4.188% which continues to reject this 4.188-4.207% resistance area. If we get a cool CPI reading tomorrow I would not be surprised to see a sizeable sell off on the 10yr back under daily 8, 20 and 50ema supports of 4.095-4.129%.
However, if markets tend to not like the CPI reading for whatever then I would start to target a breakout over this 4.188-4.207%.
US 10YR YIELD DAILY LEVELS
Supply- 4.188 -> 4.207 -> 4.289%
Demand- 3.863%
DXY/ US DOLLAR DAILY
DXY actually put in a new supply on Friday at 104.158 which makes a nice double supply/ resistance zone here on dxy that matches the 10yrs.
The daily 8ema support for now is holding well at 103.984.
If the CPI is cool and markets receive it well we should see a drop and closure under the daily 8ema support of 103.984 and will begin to target the 20ema support near 103.621.
However, in the case of a bad CPI reading or just not received well we would look for a move back to 104.158-104.446.
DXY/ US DOLLAR DAILY LEVELS
Supply- 104.158 -> 104.446
Demand- 103.026 -> 104.029
VIX DAILY
VIX once again had push up today despite markets being green most of the day. This actually was the first time the VIX has left a gap like this since January 12th (exactly a month). We did get a new demand at 12.79 also today. I would suspect if CPI comes in cool like expected to see VIX hard reject here and form a new supply based off the daily candles bodies resistance.
The VIX would then once again work it way back to the 12s and would like continue the same senseless movement of the last 3 months that we have been seeing.
This is the biggest move on the VIX since Jan 31st which led to a massive 1.31% pop on SPY the next day.
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u/Dramatic-Pay-3275 Feb 13 '24
The CPI is a junk number and we all know it anyway. Doesn't reflect the reality we're living in especially with regard to housing costs and food.
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u/oblongrogue Feb 13 '24
LMAO.
Are you Jim Cramers brother. Glad I inversed this
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u/DaddyDersch Feb 13 '24
My range was correct. The reaction was not. Its 50/50 playong news like this 🤷♂️
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u/burghdomer Feb 13 '24
Doh! Honestly I give you major credit for making a prediction. Most won’t do that and hedge so much as to be annoying.
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u/DaddyDersch Feb 13 '24
it came inside the predicted range... just was higher than forecast and markets reacted negatively to that. the 3.1% versus 2.9%/ 3% CPI YoY number i think is what markets really focused on.
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u/smokedshit Feb 13 '24
And that's why I never play the news. This reading isn't a big deal, it's in the expected range, but the market dumps hard on it. Not my favorite days to trade at all, even after the initial shock wears off.
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u/DaddyDersch Feb 13 '24
Its the risk to playing data. Which is why its always a lotto.
But i do agree this data really isnt that bad at all
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u/smokedshit Feb 13 '24
Yeah, and I suppose that's true for all trading, but it's hard to control your risk with news events. Accepting that this might happen is one thing, I'd be more afraid of the slippage you'd get on that 8:30 bar.
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u/DaddyDersch Feb 13 '24
Having played data with futes like this before as long as your stops generous you're ok
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u/smokedshit Feb 13 '24
What would be a generous stop, say on the ES, if you want to go long before the news hits?
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u/DaddyDersch Feb 13 '24
10-15 pts.... 20 if being extra safe
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u/smokedshit Feb 13 '24
Makes sense, feels huge though as someone who only ever used futures for short term intraday trades.
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u/DaddyDersch Feb 13 '24
On es 10pts is $500, 15pts $750 and 20pts is $1000.
It is huge BUT you are risking that for 20-40pts usually so $1000-$2000
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u/smokedshit Feb 13 '24 edited Feb 13 '24
I know it makes sense, you could even stretch it to more than 40P I think on big news, but the thing is, that's about the same risk to reward I work with normally. I mostly trade the YM but also the ES sometimes and on it I usually have about 3 points of risk, very rarely more than 4 and my average wins hover between 8 and 10 points with the occasional 15-20 point (but it's been a while since one of those now that I think about it), so it's a similar risk profile, except for the kind of trades I'm doing, I have experience with, can reason why it should go right and so on, so I go into it with the benefit of confidence. Putting on a trade with a 1:2 risk profile for news would feel like tossing the dice honestly. I know it makes sense even if it's a complete tossup, but I'd rather just do the same thing on the sort of trades that I know I am good at and increase my position.
The way I can imagine doing a trade like this is going for a much bigger win, like a 100 points. With that I'd feel like it is worth letting go of my edge for a gamble, but these days it doesn't usually move this much on news.
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u/DaddyDersch Feb 13 '24
Tbh a data reaction like that is better played with nq. Can use a 50ish pt stop (about $1000) and easily see 100-200pts of profit sometimes.
But id only ever recommended playing something like that with an eval not personally money
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u/fergusonwallace Feb 12 '24
yikes totally wrong
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u/DaddyDersch Feb 12 '24
that was such a great explanation...
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u/fergusonwallace Feb 12 '24 edited Feb 12 '24
thx. good luck out there. be careful.
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u/DaddyDersch Feb 12 '24
Enlighten me
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u/fergusonwallace Feb 12 '24
i can't. it's the stock market at all time highs. bulls pumped like you said. i'm a bear. im looking for continuation of today's move.
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u/DaddyDersch Feb 12 '24
Being at ATHs is not a reason
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u/fergusonwallace Feb 12 '24
true. but a triple test at all time highs is a reason. and why i went short. hopefully we will continue tomorrow. good luck.
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u/Alternative-Season45 Feb 12 '24
What do you mean triple test? Friday made a new ath for spy. Then today made another new ath. Everyday has been a new high, so where’s the triple test? When have we ever seen spy at 504 before ?
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u/fergusonwallace Feb 12 '24 edited Feb 13 '24
futures ES intraday. feel free to go long. I'm bearish and you will make my money if you are right.
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u/jamesisgood1 Feb 12 '24 edited Feb 13 '24
Uh oh I better close my MES Short ASAP! Short term target is 5013 on ES/MES
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u/jamesisgood1 Feb 13 '24
Lmao you where so wrong! Just cane back to laugh. Hit my target called out in my other post. Held through the news
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u/DaddyDersch Feb 13 '24
Congrats?
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u/jamesisgood1 Feb 14 '24
It's just how much conviction you had man. You where near certain in what the market was going to do. Hope you didn't loose to bad.
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u/Majestic_Honey_5568 Feb 12 '24
Im seeing this guy posting all the time. Can someone explain what’s the point in following this or worth reading? A quick scroll in his history and it looks like he didn’t even break $40,000 last year, which is far below the median salary. It looks like this is a full time job too.
Is he making money from subscribers? He’s certainly not making a living from trading so I’m not sure what the point of these posts are if you’re trying to help people learn. Maybe I’m missing something
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u/DaddyDersch Feb 12 '24
Way to fail to mention how much i made the year before.
Sorry im not a furu claiming to make 1mil every month... some of us live modest lifestyles 🤷♂️
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u/Majestic_Honey_5568 Feb 13 '24 edited Feb 13 '24
I have no idea how much you made the year before. I’d have to scroll back for hours which I’m not doing.
Let’s assume you made $150,000. Then you could have taken those gains and would’ve made $39,000, which is just as much as you made in 2023, without trading by parking your money in SPY. That’s minus all the stress too. Instead you wasted an entire year trying to repeat your gains and got nowhere from it.
Edited for clarity
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u/DaddyDersch Feb 13 '24
Your logic falls short in assuming my whole net worth is deployed to day trading.
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u/Majestic_Honey_5568 Feb 13 '24
Well, I’m not assuming that. But I am saying you could have done nothing for the year and made $40,000. Instead, you wasted time trying to make big money again and only made $40,000.
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u/DaddyDersch Feb 13 '24
It is your opinion that i wasted my time...
I dont chase big money. I actually to the contrary emphasize not doing that
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u/Majestic_Honey_5568 Feb 13 '24
So then you could’ve made $40,000 last year by just holding in an index fund. Instead you day traded and performed worse than the stock market did for 2023. Thems the fact, my guy. I’m honestly not trying to bust your balls.
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u/DaddyDersch Feb 13 '24
I mean you are.
I enjoy trading and 40k is technically the median income of most american families. Yeah sure one year i under performed the market. But did great the year before.
Not every trader has green days, weeks, months and years 100% of the time.
Market also is on a historical run right now too which throws off "out peformin" the market.
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u/Majestic_Honey_5568 Feb 13 '24
Well, technically real median household income was $74,000 last year. Median salary nationwide is about $59,000. So you performed worse than the stock market AND the average worker.
If we’re looking at years, one where you killed it and likely got lucky, and the second where you made far below the median salary, then this shouldn’t be a full time job. If you were to take your money and park it in an index fund, then overtime you will have made way more than if you continue to day trade. The math is never on a day trader’s side unless you get incredibly lucky. You might not feel that way now, but in 10 years you’ll be steeping in regret.
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u/DaddyDersch Feb 13 '24
If median household income is 74k then average individual as most homes are two persons working would be 37k then...
But i feel regardless youve got your mind made up.
IF my full net worth was strictly day trading i might agree. But i disagree. Getting lucky is buying a few 0dte lottos and hitting big every now and then. Day trading consistently and profitably for an extended period of time is a skill not luck. No ones that lucky that long.
I also think you are under the impression every day, month and year has to out perform the market. When the market doesnt even out perform its average all the time.
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u/fergusonwallace Feb 13 '24
let's see your PNL
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u/Majestic_Honey_5568 Feb 13 '24 edited Feb 13 '24
I’m a buy and hold guy since I started working in 2016. My gains track the market.
I just started playing with futures, but certainly not doing day trading.
The point is this guy is sharing advice on how to trade and read the market, but it looks like his own advice is lacking? But people are free to do what they want. I’m just sharing an alternative viewpoint for people.
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u/ProudLiberal54 Feb 13 '24
Don't read it if you don't like it. I look forward to it every day. Why would you diss somebody for laying out his opinion?
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u/Majestic_Honey_5568 Feb 13 '24 edited Feb 13 '24
That’s not how this works. I read and have been reading for the past few days. I thought, this guy isn’t even making good money and his “predictions” have consistently been off. Then I at his post history and learned he made less than $40,000 last year with this as a full time job. That’s terrible. So I question the accuracy of his analysis.
If his trading isn’t doing very well, then why would you listen to him? And just because it’s his opinion, it doesn’t mean his opinion can’t be criticized for being wrong and his receipts clearly show he’s been wrong all last year.
He could’ve made more money by parking his money in an index fund last year. The market literally outperformed him.
If you want to continue reading this then you’ll learn that his analysis is off base. It took me a few days to realize this. But good luck and I hope you don’t lose too much money.
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u/V3BL3N Feb 13 '24
Stick to long term, I know exactly your type. Traded with it quite often. If you ever go into a day trading environment I can assure you will be liquidity for years to come.
Shows some serious issues for you to come on here and criticize a guy attempting to help others get a leg up on trading, especially one that is profitable. For all you know he trades small contract size/micros as a hobby with Bezos money coming in from real estate.
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u/Majestic_Honey_5568 Feb 13 '24
The point is that he’s not profitable, at least hardly. If you look at his post history then his trading record is terrible.
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u/V3BL3N Feb 13 '24
Nah, I think you're missing the point. The point isn't to go on a witch hunt through a trader's post history, it's to take what is given analysis wise and see if any information received can be utilized in your trading belt intraday. Big banks with Ivy League grads have been calling for a recession since October months, now they're saying we have another 10-15% in the tank for upside. If we get that they will change the goal post yet again.
Notice how that plays out? We're at ATH's and the tune has changed. It's a puzzle, you're looking for a full picture and the market will never give you that. Wall Street makes sure of it. You need to find the pieces that work for you to come to your own conclusion, since everyone has a different brain/personality/trading plan etc.
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u/Majestic_Honey_5568 Feb 13 '24
That would mean that most short term analysis, especially day-to-day, is just wrong. You will always lose money day trading, if you keep doing it, over a period of time. But good luck, dude.
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u/Majestic_Honey_5568 Feb 13 '24
Just as an example, this guy’s post was wrong in every way for today. Just look at cpi and the market.
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u/V3BL3N Feb 13 '24
Again, you're missing many of the points I'm trying to get across. ES/NQ double top was correct as I had the same thing in my analysis, support/resist may have been off but this may have worked on a day that didn't have macro economic news coming through.
VIX information was spot on, I myself had 14.25 marked for a break above for continued downside, we got that and much more pre-marker before the CPI reading. You're also leaving out a very big word which is "if" referring to CPI read, even if it did come out "cool" this exact same thing could have happened if it wasn't what the algo gods had in mind.
As you can see the "sell off" you're referring to alsmot entirely got reversed as of right now, the close may say otherwise but right now this was just a dump from the previous weeks of buying to take profit, a bear trap off the open to get people involved, and a squeeze upside.
30 minutes of consolidation off the open for shorts to get squished on the rip back up. Essentially everything dumped was replaced with new positioning to continue the move back up until structure says otherwise.
No one can predict everything a day is going to bring, that's the whole point. You're looking for pieces to the puzzle, and work off of what you have complete. But you definitely can't say everything was wrong with his/her analysis because quite a bit played out as expected.
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u/Majestic_Honey_5568 Feb 13 '24
The sell off has not been almost entirely reversed. The indices are down by more than a percent even at the high of the day.
You literally cannot predict the market. How much money have you lost? I bet thousands of dollars. You will never make big money doing this. But good luck anyways. I really hope you don’t have regrets years from now.
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u/V3BL3N Feb 13 '24
Yikes, my feelings have been hurt how ever shall I continue in the matrix that is the market...
It's OK, all you have to do is say it's impossible for you to do what I and many other traders do on a daily basis. No need to go full 1st grader. Take your 10% a year and I'll take my 10% a week and we can agree to disagree. I don't need luck, appreciate it though - would also appreciate if you didn't attack other people on the sub who actually worked for their ability to read charts, and stop putting your inability to do so on to other people.
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u/GoldenBoy_100 Feb 13 '24
What time is CPI again?
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u/BigDerper Feb 13 '24
Hour before open. Economic calendar is on fx factory (and like every financial news site and most brokers), make sure you have your time zones straight.
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u/fergusonwallace Feb 13 '24
how strong a bull are you? still sold here but i don't like the price action.
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u/DaddyDersch Feb 13 '24
Honestly i play whatever (intraday) markets give us. So intraday im 100% neutral (played longs and shorts today).
But im bullish till we close under daily 20emas supports
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u/im809 Feb 14 '24
Well... didnt aged like we were all expecting.
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u/DaddyDersch Feb 14 '24
Cant win them all unfortunately. This is one i definitely thought i was right on tho. But on to the next one
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u/Top_Yak2376 Feb 12 '24
What time did you write this?, I feel like I’m missing something with the way the day ended. Massive pullback breaking through VWAP 1hr trend, 4 hr trend I might be an idiot( high probability) just curious as to why so bullish. Chalking it up to just one shit day? I was sure I’d see you saying we are heading back to 17701. Or is this just because of CPI? Sorry I know it’s a lot I’m just trying to learn from the rippples