Monday and Tuesday went nowhere. ES tagged 7,887 in Monday’s overnight, a point under Sunday’s sellers’ line, and spent two sessions drifting in a 50-pt box while the banks reported.
Wednesday was the move. September CPI came in hot where it counts: core up 0.3% on the month against 0.2% expected, 2.6% on the year. ES dropped 56 pts in the 30 minutes after the print, and the cash open sold again. It was a one-way trend day. It settled 7,770.25, down 85. The S&P 500 lost 1.1%, its worst day since July. Odds of a hike at the Oct 28 Fed meeting jumped from about 20% to about 44%.
Under the hood it was a rotation. The Philadelphia Semiconductor Index fell 4.3% for its 6th straight loss. Healthcare rose 2.5% and staples 2.2%. The equal-weight S&P is down less than half a percent on the week. Tech is the exception: the equal-weight tech fund (RSPT), where every tech stock counts the same, fell 3.4% and is rolling over.
Our long came off on Wednesday’s close. Sunday’s note said a close under the extreme takes the starter out, and we closed under it by 5 pts.
Below the line: Sunday’s map graded, the internals, the odds from days like this one, the new map for Thursday and Friday, where the money is rotating, and what rates and crude are saying.
