tuesdays cupboard was bear

Just following Volts menu idea for the week but forgotten the detail, sorry.

So, a red spinning top on spx, a bit more bearish than bullish. Rose on the open and kissed the trendline from the last low, from below, and respected it. The open upward surge may have been mostly short covering cos there was no follow through. There was significant buying in the last hour or two of the session, and particularly the last 15 minutes or so. Bears in control overall in the session, but only just. The bigger picture is a consolidation and some indecision, possibly more bullish than bearish in that there hasn't been a rout and the consolidation is higher than the bottom of last weeks one day decline. imho spx is still in a bullish cycle off that low.

Widening the focus some more tho, the main question for me is whether there will be enough buyers to push spx up through the very stiff resistance at the old high. The indications are they there may be. The evidence for this is the put call ratio, which actually fell last night despite the slight increase in volatility and the slight decline in spx price. Putting this all together then, spx has had a bullish consolidation which is little more so far than an opportunity for the bulls to regroup and shake out the weak hands. The majority of option traders are long, and increased positions last night.

So, if the cpi is reasonably positive, expect a substantial spx rally. If it is totally lousy, the long selling will be humungous.

As for xjo, the main focus aside from spx will be metal prices. These slid substantially last night, and if the usa cpi is weak, these will slide some more. The downside risk for xjo is greater than the risk for spx.

As for trading, it looks like a hedge day probably using options to capitalise on a big move either way but slightly tilted towards the major risks for xjo.