Stock Indices Explode Higher On CPI Release

It is always a higher probability for price to correct to the internals of a financial instrument. However, there is a low probability the internals will correct to support price. That typically occurs around a news event, which is exactly what happened today with the release of the CPI numbers. Price exploded in the Indices and the internals corrected to support price. For the last several days, the internals had been deteriorating while price moved higher. That is unsustainable unless the internals strengthen, and they did today. While the Market is now short-term overbought, there will likely be follow-through tomorrow. If not, monitor short-term support levels closely.

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