A Trading Day Setup

with update at 9:35 AM CST Inventory Report, see below.

Defensive Market…

The market seems a little defensive this morning in early trade, like no one knows what to do.

4517 is key S&P number today, 4662 is looming.

Market is about liquidity, not value. Inflation and interest rates are just something to take your eye off the ball. Chart here:

Fundamental News in background..

Inventory report showed a steep rise today as we expected. This means two things. First the FED is in a very flexible position, has done nothing so far, just talked a lot. Inventory numbers point to a big headwind and GDPNOW confirms. So interest rates for this short-term cycle probably peaked yesterday.

For me, this morning’s inventory report changes everything for the causative market factors. While I may have suspected the build, nothing confirmed until today. Charts are charts, but this is a big fundamental. The end of the interest rate rise will be big for the markets.

What this report suggests is that the supply-chain media story, other than chips for cars, is probably more about corporate double ordering because of delivery fears, and now they are awash in inventory.