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10/14/2022 |

Market Update Into October 17th: The CPI Rip Gets Stuffed

This week started off with very little bullishness across markets. The PPI number came in hot, which was a signal that so, too, would the CPI number. Thursday brought the CPI number, which was 8.2 vs. the expected 8.1 and the markets immediately reacted to the tune of a -5% drop in equities during the premarket session. Then the market opened and the short squeeze commenced. It was wild. It was powerful. It was everything that a tremendous short squeeze should be. However, in true bear market fashion, Thursday’s gains were all but erased by the close on Friday. A glimmer of hope can be found in the decrease of net new lows, which does suggest some strength brewing under the hood. Where does this leave markets going into next week? We’ll dig into the charts below.

Weekly Analysis

This week, the SPY ETF closed at $357.66 (-1.42%), finding almost perfect support at the 50% Fibonacci retrace from the Covid low to 2021 high. Another new weekly low was made, but the long wicks found on the past two weekly candles tell us there’s a great amount of indecision in this index at this time.

This is a daily and weekly chart of the SPY index.

This week, the QQQ ETF closed at $260.63 (-3.11%). finding some support at the .618 Fibonacci retrace from the Covid low to 2021 high. A new low was made on the weekly time frame, but much like the SPY, long wicks on the weekly candles mean there’s a great tug-of-war going on under the hood.

This is a daily and weekly chart of the QQQ index.

This week, the IWM ETF closed at $166.88 (-1.07%), making it the only index of the three discussed here not to put in a new low. This index has been a leader more often than not during this bear market, and it’s possible that when this leadership changes it could be a signal of a turning tide.

This is a daily and weekly chart of the IWM index.


Top Twitter Posts This Week

This is an image of the SPY chart on CPI day by @SpotgammaThis is a weekly chart of AMD by @Thetawarrior  This is a monthly chart of META by @ReddogT3.