CPI Report Is in Focus

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Our View

In the new world trading order, it's all about the rotation of the day. 

Some of these rotations only last a day or two. Some last weeks. But rest assured, there is some type of rotation going on every day.  Earlier this week, remember how the NQ was ripping higher and the RTY was down 1.5% —- rotation. 

Yesterday the RTY sold off again while the ES was trading well above 4800.00 and the bonds were down — rotation. 

I generally just look at the index, not the particular stock sector, but tech is the big one. I think it would be a good idea to make a spreadsheet of the ES, NQ, YM, RTY, and the bonds and keep track of it. If the ES keeps going up, will there be more rotation out of the Russell? And what happens when the ES and NQ are being sold? Would that be a good time to buy the RTY? 

The answer is in the price action. 

Is everyone short? Is it holding key levels? Can you see the bids? Are there buy programs coming in on the half-hour? Is it back and filling?

Because I trade both the ES and NQ, I am acutely aware of which one is being bought or sold aggressively. Yesterday it looked like the ES was outperforming the NQ, but that reversed after the early sell-off. 

What I’m saying is, not everyday but most days, there is an agenda — seeing and distinguishing what's more bid or what's more offered. In short...Like I have always said, we are not here to fight city hall and if the ES (or NQ) is going up or down I want to go for the ride.