Significant event tonightYes SYA remained flat to finish on...

Significant event tonight

Yes SYA remained flat to finish on 35.5c. Our volume was again very good, just over 243m shares traded. Although we could not finish higher, we reached 37.5c in a very strong buy, just under our ATH of 39c. Its a matter of time now - if the markets behave.

ASX Li stocks seemed to have shrugged off the anxiety of CPI number. Of the 54 stocks that I track, average gain was 4%..

Overnight US Li stocks were very tentative. Most of the stocks fell down although average margin was around 2% only. The ETF of LIT finished nearly flat.

What next -

Yesterday I had said that the probability was for a flat for US markets but there is a chance that US indices may keep momentum on the back of 3 good runs. It turned out to be another green night. But most resource stocks that I track did not follow the Index - many stocks were flat or down, very few up, something which I was expecting and hence had mentioned. But down margin was not much, so nearly flat on lower side. ASX indices have been following now for a number of days. It lose another 0.65% today. Regarding stocks, one sector that I follow was flat and other sector had a decent gain.

Yesterday the SP 500 crossed over the 50 and 100 day moving averages. But there was a number I was following and mentioned yesterday - 4120. Was it a coincidence that SP 500 reached 4119.28, nearly reaching 4120 but not getting above? It reminded me of August 16 when SP 500 did exactly same - it was within a point of reaching 200 day moving average, but did not cross that. A cross would have been very bullish. But that did not happen and after that bears took control of the market till a week back. Hope history does not repeat.

So we have reached that decisive night which can be pivotal mark on the market. Footy season is on and the feeling I am getting is similar - a preliminary final tonight, odds are slightly better a win can happen, but we could always lose. The CPI data tonight before the market opens. Last month was 8.5, expected to be 8.1 though some are saying 8. So what impact the CPI data will have? My gut feel, anything above 8 markets will not like it, how much sell - depends on how much above 8 it is. Anything 8 or below, should be favourable. Tomorrow PPI data and Thursday Retail sales - they can also provide direction later.

So what will look good for short term (till Powell does his interest rate rise)? Yesterday we closed at 4110 (above 50 and 100 moving day average). Next crucial number is 4270 - 200 moving day average. If we cross that and sustain it, it will be very bullish. The bears are waiting for another failure at that level. In August after the CPI data came out, Markets rallied for 5 days before failing on 200 moving day average. At that time we needed 200 points (5%) to cross it after CPI was announced. One month later we only need 160 points (4%) to cross it. Scene is different though - this time we have already done 4 green days.
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Why am I talking so much about the general market and not specific stocks? General market is over powering everything. We all know what happened in June. SP 500 had reached 3636 (10% below from here) and stocks had lost 50-70% of their value. Lot of analysts, hedge fund and even some big banks are calling for a big decline - most have consensus around a drop to 31-3200 (another 25 to 30% drop in SP 500 from here). Although macro is very good, its difficult to escape fear and such a big fall - it will effect most stocks I feel. We have made good gains, average around 80% since June, many stocks have gained between 100 to 200%, so its important to keep that gain. Although things are looking good, its also important to keep downside possibility in the scheme of things.

Personally, I am staying put for now. I picked up a few more shares today. It is risky so lets see. I have said that I will hold if SP 500 is above 3900, if it falls below that or looking to fall below that, then I may become defensive and let go some of my trading stocks.

So what will happen tonight? US Futures are medium green at this stage. Asian markets largely green, average rise around 0.5% except Korea which went over 2%. Volatility index did a big rise yesterday, over 5%, at 23.87 now. It just shows punters are in a very anxious stage and strong confidence is lacking. Cryptos are doing well, they seem to be ready for tonight. Yesterday when I wrote, Bitcoin was at 21.7k, now 22.4k - they look somewhat confident. The 10 year yield again rose yesterday and is at the highest level since June 16 bottom, so they are not joining the party. But it could be that similar to June 16 we have done our bottom and will keep moving forward? So what number will CPI come in? My gut feel is it will be below 8 - there is a lot of hope as well in that gut feel. Will it be much below, say somewhere around 7.6-7.7 and we get a big green? Lets hope so. All the best.