Core PPI and FOMC Minutes Tomorrow

Prices as measured by the ES futures contract traded higher until about noon today, then began to roll-over a bit. We showed the SPY 30-minute chart below, a few times and noted the pop over the wedge and the measurement of c-5 = (1.618 x a-3) + b-3 target as the Fibonacci ruler on the right shows.

Prices overshot the target a bit, and then came back down to it. In doing so, prices broke the lower up trend line a bit and closed there for several half-hours but did not yet make greatly impulsive moves lower.

With the PPI, FOMC Minutes and CPI in the next few days one might expect some volatility and/or impulsivity lower. If so, keep an eye on the prior iv th wave which is at the 62% retrace level. If that gets broken, then it may be possible to revisit or exceed the lows. However, now is not the time for expectations or heroics in front of these reports until their content is known and understood. Rather, it's time for patience, calm and flexibility.

The lack of downside impulsivity and speed (so far) continue to suggest that if prices move lower, they might do so in an expanding diagonal. I have not completely ruled out the nested count lower (1,2, i, ii..) but in that count downside progress would likely have been more definite. Still, I may put it back on the table depending on any downward movements.

Have a good start to the evening,

TraderJoe