Inflation_report — Trading Ideas on TradingView

Core and Headline CPI RELEASED (Dec 2023 figures)Core and Headline CPI (Dec 2023 figures) U.S. Headline CPI Prev: 3.1% Exp: 3.2% Rep: 3.4% 🚨 HIGHER THAN EXPECTED 🚨 U.S. Core CPI Prev: 4.0% Exp: 3.8% Rep: 3.9% 🚨 HIGHER THAN EXPECTED - but still fell from 4% to 3.9%✅ CORE CPI FALLS BELOW 4% FOR THE FIRST TIME SINCE MAY 2021 We have a long way to go before we reach the Fed Target of 2%. Additional info previously shared: Core vs Headline (the difference) You can clearly see how Core CPI is less volatile than Headline CPI on the chart. Core CPI removes the volatile food and energy expenditures to provide the underlying inflation trend. Food and Energy is included in the Headline inflation which as you can see from the chart is much more volatile and changes direction quicker than core inflation. Its almost like an oscillator around the core inflation line. The Feds 2% Target It is clear that we are not at the Federal Reserve’s target inflation rate of 2% on both fronts (purple line). It is critical to understand that we are still not at or below the target 2% level regardless of the FOMC’s determination of a likely hold on interest rates and reductions to interest rates in 2024. Lets see can the target be met first. You can see that since 2002 Core CPI has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardised zone between 1 – 3%.

Generally Up Until Tuesday With Intermediate wave 1 likely in the books, I have projected the top for Intermediate wave 2. It won't be as high as originally thought. Minor wave A could end tomorrow or Friday and wave B could end Friday or Monday. The end looks like maybe Tuesday based on historical data. Intermediate wave 1 ended about an hour late today but the market roared after the bottom per analysis: The move up this afternoon almost ran the whole length of Minor wave A's expectation so a cool off today may continue to provide room for gains tomorrow. The inflation read still appears to be a catalyst for gains, but maybe 20-30 points early on Thursday is not a significant jump or confidence in the reported numbers which the pundits may add the context of fuel prices having gone up after the end of July. This realization should led the market down into Minor wave B temporarily and then some sort of short rally should occur Monday/Tuesday. The next drop should be another 150-300 pointer. The projected bottom for this first Primary wave 1 down right now is early October, however, based on the ending point of Intermediate wave 1, it is possible the bottom is October remains above 4050 AND the final market low toward the end of 2024 could remain above 3100 based on the analysis here:

Delayed bottom may finally arrive with CPI report I have been waiting over a month for the reversal to finally complete. We are clearly on the path, but still need a few more things to occur to confirm that we are still in Primary wave B, but that it is near completion. IF we are still in Primary B (blue letters), we are likely in Intermediate wave C (purple letters) and Minor wave 3 (yellow numbers) was possibly completed with the with low early this morning. Next steps would be Minor wave 4 up and then Minor wave 5 down which completes the two macro waves (Intermediate and Primary) above it as well. Minor wave 4 should only last 1-2 days with a top below 4000. Target top is around 3982 by either tomorrow or Monday. We should then continue the final leg down with a drop of at least 130 points before March 16 and closer to March 14. I have use wave extensions based on historical data to attempt to determine these reversal points. The most narrow and smaller set of data is the probably Minor wave 4 retracement points. While the top could go above 4000, it most likely would not surpass 4053. The short timeline and lack of game-changing information will likely limit a powerful upside burst above 4000. The next set of extensions attempt to identify the end of Intermediate wave C based on the data for Intermediate waves A and B. This is the left most set of extensions that are at the top and bottom of the chart. Typically Intermediate wave C extends beyond 127.13% of Intermediate wave A, however, that move seems quite significant in the likely short period of time that remains. The bottom should move below 3764 which was the prior low from the end of December, but nothing more is required to closeout this wave. I am placing the lowest possible bottom around 3700 but it depends on the momentum which will be apparent by next Friday. This will continue to be evaluated The final set of extensions attempt to identify the end of Primary wave B based on the data from Primary wave A when compared to historical wave relationships. March 16th would tie the longest length relationship between a Primary wave A to Primary wave C. This also corresponds to the longer end of relationships for Intermediate wave A to Intermediate wave C. The extensions are the furthest set to the far right. In order to meet a 100% extension for Intermediate wave C, this would create around a minimum 50% retracement for Primary wave B from wave A. The extension ranges for this data are quite wide and my targeted forecast moves are around median movements which are easy targets to pick. I will re-evaluate late next week to see if Minor 4 occurred near the plan and if wave 5 had begun. Best case all of this finally occurs and we can finally end Primary wave B. A major change after the recent spat of declines would likely stem from a major event. The Fed doesn’t meet until after the 17th of March, but the CPI report is on the 14th. If the bottom occurs on or before the 14th it could be based on the set of data. A lower inflation reading could spur the rally and then the Fed confirms inflation is coming under control a week later further igniting the next rally. Primary wave C would start around 2 months later than originally predicted, but it would likely place the next market top in mid- to late-summer. I still forecast a nice top above 4400-4700 before my doom and gloom forecast which I will touch on later and can be found in my old forecasts going back almost a whole year now.

Bottom before CPI followed by months of green Testing for perceived location: SubMillennial wave: 1 Grand SuperCycle wave: 5 SuperCycle wave: 2 Cycle wave: B Primary wave: B Intermediate wave: B Location ID: 152BBB This is an update on the progress of Primary wave B. My last analysis ( ) projected Intermediate wave A (inside of Primary wave B) to bottom on December 22 which appears to be the case for now. Minor waves 3 and 4 inside of Intermediate A did appear to hit their marks as well. Minute wave 3 in Minor wave 3 was confirmed on an hourly chart by using my Elliott Wave 3 Finder ( ). This would appear to confirm the location of Minor wave 3 and further confirm Intermediate wave A is over, even though the bottom was not as deep as projected. The prior analysis also projected Intermediate wave B to top around 3925 by January 5. Due to Intermediate wave A not dropping as far, wave B may not reach this top. The following are the projections for the end of Intermediate wave B based on the assumed conclusion of Intermediate wave A. Intermediate wave A lasted 15 trading days, moved 278.13 for a rise over run of 18.542 points per day. The left most set of lines are for determining Intermediate wave B endpoints. Based on waves ending in 2BBB, the length of Intermediate wave B may only be 3 to 4 days (which we are beyond at this point). The most current top was 4 days after the end of wave A which theoretically means Intermediate B could be over. In my opinion this movement would be quick and historical data for waves ending in 2BBB is very limited so let’s explore the other datasets first. The quartiles for movement retracement are at 39.28%, 56.545% and 73.81%. This would point to tops at 3896.48, 3954.49, and 4012.50 (the light blue lines on the chart). Based on waves ending in BBB, the strongest model agreement for length is at 3 and 4 days again, with additional indications of 5 and 9 days long as well. The maximum lengths are generally only 60% of wave A’s move, while most are no higher than 33%. This would likely cap the length of wave A at 9 days, with a more likely cap at 5 days. Movement retracement quartiles are at 29.76%, 52.325%, and 68.64%. These are the yellow lines on the chart. The largest dataset, and less specific, is for waves ending in BB. In order of strongest model agreement intermediate wave B could last 4 or 3 days. The third most agreement is a tie amongst 5, 8, 15, and 30 days. Fourth most agreement is at 9 and 11 trading days. Movement retracement quartiles are near the previous levels with the 3rd quartile being the outlier at 86.58% (the white level on the chart). All datasets tend to point to a length around 3-4 days which has not only passed our current position but the current top was achieved on day 4. The level may have been lower than the quartiles from the models, however, it is in line with some of the historical movement. We will likely wait and see what happens next. Based on what would have been expected of Intermediate wave B, we will now assume Intermediate B has completed and begin to forecast Intermediate wave C. The plots for Minor waves A and B and end point for Intermediate wave B are plotted on the chart. This also means this first week of 2023 should move below the high from December 29, 2022 for a few weeks. ============================================ Current location: SubMillennial wave: 1 Grand SuperCycle wave: 5 SuperCycle wave: 2 Cycle wave: B Primary wave: B Intermediate wave: C Location ID: 152BBC The data for Intermediate wave A has not changed from above which was 15 trading days long, drop of 278.13 points for rise over run of 18.542. With the assessed conclusion of Intermediate wave B, it lasted 4 trading days, rose 35.81 points for a rise over run of 8.953 points/day. Intermediate wave B retraced wave A’s length by only 26.67% and retraced it’s movement by 12.88%. The centermost lines in the chart above outline the potential endpoints for Intermediate wave C. Based on waves ending in 2BBC, Intermediate C could last 6, 8, 11, or 12 trading days. No one value stands out. The movement extension quartiles are very compact at 127.13%, 130.095%, 133.06%. These levels are light blue above. Based on waves ending in BBC, the most model agreement has Intermediate wave C ending at 8 trading days. Secondary agreement is at 5 and 12 days. Many points all tie for third most agreement. The movement extension quartiles are 104.14%, 121.565%, 127.47%. The new levels are the yellow lines above. Based on waves ending in BC, the most model agreement has Intermediate wave C ending at 2, 4, 8, 12, and 15 days. The second most agreement is at 5 trading days long. Third most agreement is at 16 days. The movement extension quartiles are at 108.66%, 133.315%, 147.17%. These levels are the white lines in the middle section above. Based on all of these considerations it looks like we are in for a down week to begin 2023. I have placed the end of Intermediate wave C (which is also the end of Primary wave B around 3663 on January 11, 2023. That means we could drop a little less than 200 points over the next week and a half. All things considered with the market’s volatility over the past year, this will be slow and likely full of indecisive trading. The rightmost set of retracement lines outline the overall retracement of Primary wave B in relation to Primary wave A. This target bottom would place the overall retracement around 70% of Primary wave A’s gain of 600+ points. What could be the catalyst for this final bottom? I have us rising strong until the summer of 2023 with highs above 4400-4600 range. January 10th and 11th will be quiet on the economic news front, however, the latest CPI read will be January 12th. This could be the catalyst. There are likely 2 ways to consider this number and things to remember. Inflation really accelerated one year ago. Inflation is likely high, but when considering where we were one year ago it should drop significantly. Therefore, the algorithmic trading computers will likely see a low print as a high win for the Fed and its monetary policies of the prior year. Although this is hiding a major issue, people will not care to look at the actual cause. A low print will start the moonshot the market is soon to face. I will have plenty of time in the coming months to explain why the market top in mid-2023 will be followed by a likely 40-50% drop in the market, but who cares. Enjoy the quick gains and be ready to play it safe later.

Estimated Path To Next Summer Full analysis to follow with specific near-term levels. Prior Intermediate 5 did not move as expected so that likely puts us inside of Primary wave B heading down. Early estimates have us in Primary B Intermediate A Minor 3 Minute 2 This means wave 3 of 3 is next with the inflation report tomorrow morning. Early signs per this would have November inflation hotter than expected. Fed also determines next rate hike on Wednesday. Looks like first near-term bottom could be prior to Christmas followed by highs after New Year while most of January points down. The January bottom should hold for quite some time as we should rally after the late January low until the early summer. The final downturn is still slated to begin in early to mid summer for northern hemisphere folks. Early estimates still place the final bottom around 2200-2400 by March 2025.

Elliott Wave indicates another hot inflation report We believe we have finished Intermediate wave 3 after an extended Minor 5 and are somewhere into Intermediate wave 4 which should bottom soon. The full wave identity is 152BA4. Based on waves ending in 2BA4. Intermediate 4 will likely last no more than 3 trading days which would end tomorrow. The quartile movement retracements are at 20.04%, 26.20%, and 32.36%. We surpassed the 26.05% level today which was 3995.07. The 32.36% is the third quartile and that would place the bottom around 3970.31. These values are light blue. Based on waves ending in BA4, most model agreement stands at a length of 1-2 days while 3 days remains likely. Regarding the retracement levels, the first quartile and median are repeated values while the third quartile is at 48.55% for a potential retracement. This would place the bottom around 39.05.20. These values are yellow on the chart Finally, historic waves ending in only A4 provides many more datapoints, however they may be less concise from the precision provided in the prior two paragraphs. Strongest model agreement places the length at 2 days, followed by 1 day, then 6, 3, 10, and 4 days. Regarding the retracements, quartile values repeat again for the first two while the third quartile is near the 61.8% Fib (low at 3851.85) Based on these datapoints, the models are leaning to a length of two total days for Intermediate 4 which would mean the bottom has already occurred at the time of writing. I am still leaning on a possibility of 3 days meaning we could see a new low early tomorrow before a likely rise into Intermediate wave 5 for which I will consider tops later. Early thoughts has Intermediate wave 5 lasting around 5 trading days before we begin the next downturn. Early thoughts to the top should be slightly above current resistance setting up a bull trap and snap back down. These five trading days not including tomorrow (if we achieve a new low for Intermediate wave 4) would begin on Wednesday and end around early next week. This aligns with the Inflation report on Tuesday. If this is the catalyst, inflation likely rose higher than expected and Fed backtracks on cooling down in December which would re-spiral the market for the next month or two.