Inflation Data

Outlook 02/14: U.S. stocks futures turned lower on Wednesday after U.S. inflation data came in higher than expected (0.5% vs. 0.3%), rekindling the fears of interest rate increases that had contributed to last week's precipitous drops.

/ES Value: YVAH 2667 YPOC 2663 YVAL 2645

/ES Plan: Yesterday market closed leaving bullish imbalance (PBT 2688) and overnight is multimodal moving below Yesterday's value. CPI data was a news driven event so 'SoC setup' comes into play with 2 options:

A) If market remains below YVAL 2645 with bearish internals, try to be a seller leaning on 2645-44 towards ONL 2627 GAP 2618 and LVN 2607. 'Look below and fail' is a signal of strength.

B) If market starts to move above YVAL 2645 with bullish internals, try to be a buyer leaning on 2645-44 towards CPI SoC 2657 and YVAH 2667. 'Look above and fail' is a signal of weakness.

Tips: Market does appear to be calming down but depth of market (DOM) is still thin, mostly below 200s contracts. A 'normal' orderbook usually shows 300-400s. If you can't trade using wide stops (10-15 pts), I recommend to trade 1/2 of your normal size or stay aside until the markets stabilize and recover a 'normal' regime.

Today's Economic Calendar

10:00 Business Inventories
10:00 Atlanta Fed's Business Inflation Expectations
10:30 EIA Petroleum Inventories

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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