Wednesday’s PPI number came in at 9.5% inflation, which initially produced a somewhat negative reaction from the markets that ended up producing a more bullish reaction once the US opened. I have adjusted the labeling because the subdivisions become to many with the today’s trade beginning to show the potential for a sub sub minute degree, which for me would be too much. So, the change is that I have moved the initial Minor wave one down to Monday’s low at 13903 with Tuesday’s and today’s trading being waves a and b of Minor wave 2 and wave c still in progress. It doesn’t really change the intensity of the decline or the depth. Initial Fibonacci extensions continue to suggest that the larger Intermediate wave 3 should find support to complete below 10,000 at the 9063 area. Tomorrow is the monthly expiration for April options since Friday is a holiday with the US markets closed. I’m feeling then that today’s bullishness is most likely connected to Thursday’s expiration cycle. For Thursday I would expect wave “C” of Minor 2 to continue higher likely reaching the hourly 200 MA currently at 14390. Ultimately, once finished the Minor wave 3 decline should kick in and again begin to drive the NQ lower with an increase in acceleration.
February 2, 2023
Thursday’s trade was revealing and wild ending with the trifecta of surprises. The upside ...