Daily Analysis - Wednesday, 1/15/25
Core CPI came in cool this morning. Is this the signal NQ has been waiting for to break out of this downtrend?
Disclaimer
This publication and its authors are not licensed investment professionals. Nothing posted on The Shmuts blog should be construed as investment advice. Do your own research.
The Week Ahead
Today - Wednesday - 1/15/25
8:30am EST - US CPI YoY (Expected: 2.9%, Actual: 2.9%)
8:30am EST - US CPI MoM (Expected: 0.4%, Actual: 0.4%)
8:30am EST - US Core CPI YoY (Expected: 3.3%, Actual: 3.2%)
8:30am EST - US Core CPI MoM (Expected: 0.3%, Actual: 0.2%)
Thursday - 1/16/25
US Retail Sales MoM (Expected: 0.6%)
US Initial Jobless Claims (Expected: 210k)
Friday - 1/17/25
8:30am EST - US Housing Starts Number (Expected: 1.325M)
9:15am EST - US Industrial Production MoM (Expected: 0.3%)
Prior Session Stats and Analysis - Tuesday, 1/14/25
Session Open: 21,071.50
Session High: 21,129.75
Session VAH: 21,015.50
Session POC: 20,962.50
Session VAL: 20,846.50
Session Low: 20,773.50
Session Close: 20,923.00
Session Settlement: 20,919.50
Session Range: 356.25 pts, 1425 ticks
OI Change (Prelim): +2,209 (NQ) / +4,744 (MNQ)
Prior Session Analysis
Yesterday was a Normal Variation day with range extension to the downside after a fairly modest Initial Balance was put in during the first hour.
Sellers were in control off the open, auctioning price down to the 20,820 area until around 11:30am. Buyers then took back control, auctioning price back up to just above 21,000 until 2pm.
Sellers then took back control, showing there was no appetite for price above 21,000. During this auction down, they were able to push price lower to the 20,800-20,780 area before buyers took back control, and we closed back in the middle of the range.
We saw a modest increase in new business yesterday, with +2,209 contracts added to the NQ.
Keep an eye on the 20,820 down to 20,780 area today if CPI comes in hot and we see price auction down. Conversely, if CPI comes in cool, 21,140 to 21,170 will be a key area to watch. This was an area of support earlier in the month and has been an area of resistance since price broke below it on Dec 10th.
Plan for Today - Wednesday, 1/15/25
As of the time of writing this, Core CPI MoM has come in cool at 0.2%, below the expected 0.3%. This is good news for the market and we have seen a bullish reaction in price.
Right now overnight inventory is very long, 350+ points above yesterday’s settlement price near 21,300. We are set to open out-of-balance above yesterday’s range.
I will have a bullish bias today, this was the good news the market has been waiting for after the recent selloff.
Trading Plan for Today:
Bullish: I will be looking for an opening range breakout trade to the upside off the open. If we don’t get it, I will look for opportunities to get long on a pullback. If price is stubborn and auctions down, I will look at yesterday’s high at 21,129 as a place to look for a reversal. Today could end up being a great momentum trading day.
Bearish: In the unlikely event the market turns bearish, anything can happen, I will look for a breakdown in price into yesterday’s value area but I would be surprised to see price get near yesterday’s low at 20,773. There was strong support, as mentioned above in the 20,820 down to 20,780 area. I would want to be out of any short trades before price reaches these area.
"Day trading is not about being right every time—it’s about being right enough." – Unknown