Headlines Driving us Crazy: CPI Holds the Key to Market Direction

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Well, forget spring break, it’s already started and it was another day in paradise for the ES and NQ. Both sold off on Globex and then rallied. After opening the regular session, the ES surged 101.75 points to 5635.75 at the 10 AM JOLTS release before chopping its way to the low of the day of 5554.50 at 1:21PM a drop top to bottom of 101.75 points. It then reversed again, rallying 109.75 points to a new high of 5643.75 at 2:54 PM, before selling off to 5572 after the MIM showed $1.2 billion to sell.

This, my friends, is what I call CNW (Crazy, Nuts & Wild). The problem is I do not see an end in sight. Maybe there are signs of a thaw in talks between the U.S. and Canada, and Ukraine has reportedly agreed to a ceasefire with Russia, but Putin hasn’t. Everything is a circle jerk, and the markets are reacting to every headline as all three indexes just notched their worst two-day drop since August.

Some say things are improving, but I don’t see it. If you get bullish into a rally, you lose. Maybe there’s potential for a relief rally, but the months ahead remain very uncertain. I don’t think this is just a pullback—I think it’s a prelude to something bigger. That said, I have to admit the ES, and especially the NQ, are very oversold.

Today is all about the CPI number. Economics. The median estimate (year-over-year, not seasonally adjusted) for the consumer price index for February 2025 is 2.9%. If the actual number comes in at 2.9%, it would mark a decrease from the previous month and would be below the trailing 12-month average of 3.0%.

I am going to keep this short and sweet: the ES is stuck in a 5540-5640 chop. How long can it remain like this? I have a feeling that today's CPI number may change that. If the number fails to inspire, ES 5500 is dead meat, if it comes in better than expected, I think the NQ will take off.