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CPI Is Out, Retracement Buy In The S&P 500

This morning has brought a slew of data metrics to the market for digestion. On the open, U.S. indices look to be holding their own with the DJIA down moderately and the S&P 500 trading flat. Investors look to be non-committal early on as both are trading near all-time highs.

Remember, the U.S. FED’s interest rate announcement is only 6 days away. Like all of the others, this one has blockbuster potential. Experts are yet to release official projections (most likely on Monday), but the overall sentiment is that a .25 point raise is in the cards.


Today’s Metrics

There have been several data releases during the pre-U.S. session:


Event                                                           Previous                Projected                Actual

CPI (MoM, Aug)                                              0.1%                     0.3%                     0.4%

CPI (YoY, Aug)                                                1.7%                     1.8%                     1.9%

CPI except food and energy (MoM, Aug)        0.1%                      0.2%                    0.2%

CPI except food and energy (YoY, Aug)          1.7%                      1.6%                     1.7%

Continuing Jobless Claims (Sept. 1)               1.951M                  1.985M                1.944M

Initial Jobless Claims (Sept. 8)                         298K                      300K                    284K


The big takeaways are the CPI and Continuing Jobless Claims numbers. CPI came in above expectations, meaning consumption is a bit stronger than expected. The Continuing Jobless Claims statistic dropped moderately from the previous release and came in 40k below projections.

So, what does it all mean? Consumption is up, unemployment is down. Both metrics are positive signs for the U.S. economy. Of course, the FED will officially weigh in with their diagnosis on September 20th.


Trade Idea

For the U.S. session,  I have a bullish bias towards the December E-mini S&P 500 futures. Finally, we may be in a position to buy a good Fibonacci retracement level.


E-mini S&Ps DailyDecember E-mini S&P 500, Daily Chart


This trade is an intraday scalping setup:

  • Long from 2486.25

  • Stop under 50% of this week’s range at 2480.75

  • Take profit at 2491.75

  • Simple 1:1 Risk/Reward ratio

As with all trades, watch your use of leverage and adhere to solid risk management principles!

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Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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