2023/05/10 (227.090) Technical Analysis

Todays US Inflation Figures Better Than Expected!
But What Do We Do Now With Our Long 4XSetUp In The DOW Future?

US Futures Rally After Inflation Data Today

US stock futures rose on Wednesday, after the CPI report pointed to a slowdown in inflation increasing bets the Fed will pause rate hikes in June. The annual inflation rate in the US fell to 4.9% in April, the lowest in a year and below market expectations of 5%. In pre-market trading, Airbnb and Twilio both tumbled more than 15% on weak forecasts; and Rockwell Automation lost nearly 3% following a report that the Biden administration is investing if the infrastructure technology company exposed assets. On the other hand, Rivian advanced 7% on a narrower-than-expected loss.

US core consumer prices, which exclude volatile items such as food and energy, rose by 0.4 percent from a month earlier in April of 2023, unchanged from the previous month and in line with market expectations. Consumer costs rose considerably for used cars and trucks, halting a long series of decreases, and continued to rise for shelter and medical care. Year-on-year, core consumer prices advanced by 5.5%. The annual core consumer price inflation rate in the United States, which excludes volatile items such as food and energy, ticked down to 5.5% in April 2023, as expected, from 5.6% in the prior month, amid a downtick in the cost of rent. On a monthly basis, core consumer prices rose by 0.4% from a month earlier in April, the same pace as in March, in line with market expectations. Food inflation in the United States fell to a 15-month low of 7.7% year-on-year in April 2023, from 8.5% in the prior month and a peak of 11.4% in August 2022. Prices continued to slow down for food at home (7.1% vs 8.4% in March) and food away from home (8.6% vs 8.8%).

The Dow Jones was gaining more than 200 points, the S&P 500 rose 0.9%, and the Nasdaq climbed nearly 1% on Wednesday, as investors welcomed the fresh CPI report showing that headline inflation in the US unexpectedly slowed last month. The reading increased bets that the Fed will pause interest rate hikes in June and cut later in the year. Meanwhile, a fall in Treasury yields offered tech shares some support. On the corporate front, shares of Rivian were up nearly 9% after the electric-vehicle manufacturer reported a smaller-than-expected loss. On the other hand, shares of Airbnb (-12%) and Twilio (-16%) dropped after both companies gave a cautious forecast for revenue in the second quarter. Rockwell Automation was also down (-1.5%) following a report that the Biden administration is investing if the infrastructure technology company exposed assets.Last Week I Wrote For You, Yes Escpecially Yo, My Basic Technical Scenario
– The Short-Term Bullish Trend Vs. The Nedium-Term Bearish Trend To Break The GAP
– So That You Can Trade The DOW JONES Future Highly Professionally Too, If You Want It,
But This Week I Would Like To Go Better, Because I Noticed A New Technical Constellation Today

Once again; here my detail overview reminder. The last bullish short-term GAP from August 2022 must be defended by us bulls, in the Dow Jones Industrial Average Index. Because a price action below would manifests a mod-term failed breakout-formation in retroperspect. At this point, the us inflation was at its peak. Which of course we didn’t know at the time. And why the Dow Jones Industrial Average Index, after the high of the breakout at 34281.36 points on 08th August 2023, fall back until on October 13th 2022, and traded new lows at 28660.94 points.

In November 2022, the Dow Jones Industrial Average Index was then traded above the GAPS again for the first time.
33130.63 (daily low of 08/10/2022) and/or 32877.53 (daily high of 08/09/2022) – more precisely on 10/11/2022. And while this GAP was defended in December 2022, January 2023 and/or February 2023, investors and/or traders traded the Dow Jones Industrial Average Index below it again for the first time in March 2023. So, from a technical analysis point of view, a short-term technical reversal pattern formed. And that´s why I formulated even this long Technical Analysis 4XSetUp for the DOW JONES Future, by the way I even formulated it. Because the fight of the bulls and/or bears for the price action between 33130.63 points & 32877.53 is something like a front line for me. Because the short-term bullish trend reversal formation, below the GAPS, from March 2023 is opposed by a medium-term bearish trend reversal formation, just since November 2022. This is the technical picture that I currently perceive in the Dow Jones Industrial Average Index. And that’s why I pay attention to the lower price action brands around 32948.93 points, 32812.33 points, 32573.43 points and or also 32500.73 points. Which are below the GAPS. In retrospect, however, it was something like low prices, what you can see in the daily charts, with the help of the pivot points. These brands must be defended. At which level we more or less entered our long 4XSetUp in the DOW JONES Future.

And now I would like to bring the trading date of Tuesday, December 13, 2022 into play today.
Because the US consumer prices were also published on this trading day. And with 7.1% they were not only better than in the previous month with 7.3% but also better than expected with 7.3%. Which just proves to me that US WallStreet, particularly the DOW Jones Industrial Average Index, trades primarily, not the US inflation map. Because the spread between US inflation and/or the US key interest rate is now lower than it has been since the outbreak of US inflation; since the outbreak of Russia’s war of aggression against Ukraine, since Joe Biden’s inauguration in the White House. And this despite the fact that volatility is one of the highest on average on the day US inflation is published. Okay, most colleagues argue that the US yield curve is going crazy; which I do not fundamentally disagree with – but currently (today) cannot prove any signs of an imminent US recession. Because the last US economic growth accelerated to 1.6 percent year-on-year during the first quarter of 2023, up from 0.9 percent in the previous period, a preliminary estimate showed. Which is more due to bad sentiment in the US; because the self-inflicted and politically desired green US inflation is biting into the wallet of every single US American. Like here in Europe, especially in Germany (because of the green inflation) also, so that we buy less and less for the same amount.

The US Inflation Numbers On Wednesday This Week Will Guide The Dow Jones Industrial Average Index This May More And/Or Less
– No, Not The Number Themselve, But Rather The Reaction Of All (Not) Involved Traders And/Or Investors In The DXY And/Or US10Y Also

Actual Forecast Previous Release Date Actual Forecast Previous
4.9% 5.0% 5.0% May 10, 2023 (Apr) 4.9% 5.0%

in comparison to YoY in comparison to exceptation

5.0% 5.2% 6.0% Apr 12, 2023 (Mar) 5.0% 5.2% 6.0%
6.0% 6.0% 6.4% Mar 14, 2023 (Feb) 6.0% 6.0% 6.4%
6.4% 6.2% 6.5% Feb 14, 2023 (Jan) 6.4% 6.2% 6.5%
6.5% 6.5% 7.1% Jan 12, 2023 (Dec) 6.5% 6.5% 7.1%
7.1% 7.3% 7.8% Dec 13, 2022 (Nov) 7.1% 7.3% 7.8%
7.7% 8.0% 8.2% Nov 10, 2022 (Oct) 7.7% 8.0% 8.2%
8.2% 8.1% 8.2% Oct 13, 2022 (Sep) 8.2% 8.1% 8.2%
8.3% 8.1% 8.5% Sep 13, 2022 (Aug) 8.3% 8.1% 8.5%
8.5% 8.7% 9.1% Aug 10, 2022 (Jul) 8.5% 8.7% 9.1%
9.1% 8.8% 8.6% Jul 13, 2022 (Jun) 9.1% 8.8% 8.6%
8.6% 8.3% 8.3% Jun 10, 2022 (May) 8.6% 8.3% 8.3%
8.3% 8.1% 8.5% May 11, 2022 (Apr) 8.3% 8.1% 8.5%
8.5% 8.4% 7.9% Apr 12, 2022 (Mar) 8.5% 8.4% 7.9%
7.9% 7.9% 7.5% Mar 10, 2022 (Feb) 7.9% 7.9% 7.5%
7.5% 7.3% 7.0% Feb 10, 2022 (Jan) 7.5% 7.3% 7.0%
7.0% 7.0% 6.8% Jan 12, 2022 (Dec) 7.0% 7.0% 6.8%

US Inflation Rate Continues To Fall
The annual inflation rate in the US unexpectedly edged lower to 4.9% in April 2023, the lowest since April 2021, from 5% in March and below forecasts of 5%. Food prices grew at a slower rate (7.7% vs 8.5% in March) and energy cost fell (-5.1% vs -6.4%), namely gasoline (-12.2%) and fuel oil (-20.2%). Also, shelter costwhich accounts for over 30% of the total CPI basket, slowed for the first time in two years (8.1% vs 8.2%). At the same time, prices for used cars and trucks declined once again (-6.6% vs -11.6%). Compared to the previous month, the CPI rose 0.4%, much higher than 0.1% in March but matching market expectations. The largest upward contribution came from cost of shelter (0.4%), used cars and trucks (4.4%) and gasoline (3%). Excluding food and energy, the CPI rose 5.5% on the year and 0.4% on the month, in line with market forecasts.

How To Trade The DOW JONES Future?
What To Do Next Days And/Or Weeks With Our Long 4XSetUp?

As I wrote at the start of this Technical Analysis 4XSetUps, all this week!
Last week the 2 major central banks and this week inflation data. After the quarterly report season, in relation to the 1st quarter of 2023, had its peak in the previous week. More influential new information regarding to the price action doesn’t get any better! And not only for the EURUSD pair, but also for both yield curves, and/or stock markets – on both sides of the Atlantic. And the heavyweight SP500, which is sort of the standardized benchmark for US stocks, if you will, doesn’t get past the 4200 mark. Because the handful of well-known tech giants of the last decade seem to be running out of breath – breathing is getting heavier & heavier. With such an high fundamental valuation; which more & more are simply no longer able to pay, with a guaranteed interest rate of over 4% (over a year)! Or? And that`s why i`m thinking about outspokn to close this long 4XSetUp DOW Future Trading Capability! I`m truly thinking about it to close all our long 4XSetUps in all stock markets; the german DAX Future and/or indian SENSEX Index ioen trading capabilities also.
But more about it, may be, tomorrow – after the us proder prices and/or the proce action reaction comes out…