The spectre of CPI hanging in the air
Yes SYA lost 1.5 to finish on 21.5c. Our volume was on the average side, just over 132m shares traded. We are getting towards lower range of 20c to 28c trading zone. Hopefully we hold this level - buyers should come in as its becoming very cheap. Only problem is shorters - have not checked the volume around that.
ASX Li stocks declined with indices. Of the 54 stocks that I track, average loss was 2%.
Overnight US Li stocks were mixed. The ETF of LIT and few other stocks lost 2%, but few other stocks also gained around 2% - so probably an even day across...
What next -
Yesterday US indices again went down. SP 500 losing 0.75% to be on 3612, second lowest finish for the year. Nasdaq closed on a 2 year low. So its obvious we are in deep down territory. ASX too fell, but moderately around 0.34%.
Today there were some stocks that wanted to go up, they tried, but the ghost of CPI due on Friday is spooking everyone, and they had to retreat.
Yesterday I had mentioned around the elliot wave theory and numbers. I had said that if we are in wave 5 (down leg) and we go down, first number to be tested would be 3585 on SP 500. Yesterday SP 500 rebounded of 3588 - very close as I was expecting, but the recent September low held, for now. There is a chance of making a triple bottom and rebound of these levels - that would be good.
Chart Perspective - If the Wave 5 is in progress, which it looks like, then we are in downtrend. The bad part of wave 5 is it is a big/strong final leg down. The good part is that this is supposed to be final leg down, and there is a chance we may reach the final bottom or a substantial bottom before a good rally can happen. At this stage for tomorrow, there is a chance that within wave 5 we may have a small bounce, but equal chance of going down. If we go up, SP 500 number 3660 will be first resistance, but key resistance at 3720 to make good run up, crossing that will be bullish. In the down side, 3500 could be tested if it continues going down.
One other thing to note from CPI event. Previously stats show that if we have rallied upto CPI number, then we lose big on CPI day. The reverse is true as well, if are going down reaching the event, we have had a rally. But these are just stats with probability, each event is different and anything can happen.
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Personally as I mentioned on weekend and yesterday, I have gone defensive. I do hold all my long shares which I don't trade, but have let most of trading shares go - except some which are on strong uptrend. I feel its better to see what happens on CPI, I know I may miss a initial gap-up jump if its good news, but there may be more surety of making some coins. That's my way of managing risk, may not be best, so please dyor.
So what will happen tonight? US Futures on slight red. Asian markets largely red with big fall in Japan. Bitcoin struggling to hold 19k - real test coming for them - if it does not hold, an indication for stocks. Volatility index VIX on 32.45 - in high volatility zone - not good for stocks. Recent high of 35s in play. Bond market will open today, hopefully it does not keep climbing up. Dollar is still going up, and stocks are inverse to that, hence going down. There is a slight chance of some bounce today, it would be good to get that so we create buffer for any more falls. Will that happen? Lets hope so.
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