CPI was as expected considering PPI and inflation pressures are subdued. Claims are still peeling off at least a hair, but all things considered if the economy is recovering it is without jobs so what does it really mean. Again, despite what most might say is at least decent news the equities saw barely a pop and fixed income didn’t budge. The message: again the news is priced in and this market is way overdue for a correction. We saw more signs of this yesterday as the market entered a huge selling tail with no previous volume and should have ripped through it but just poked its head through. We may see one more retest of YH at 65.50, but if so we will be selling it if order flow confirms these opinions. It may not make it that far so we will be watching the OH at 64 for a short fade as well. With quad witching tomorrow I don’t see much likelihood they will press to new highs given the topping signs so we have no breakout long we are looking at today. We will look to fade the key YL/OL level at 57.50/25 at least for a scalp and possibly back into balance at 60/61. 55.75 at the day before yesterday high may be a key support level that will be at least a good scalp fade as well. 54 may be a fade as well. If it breaks short (which we doubt) we would wait to sell under 53.50 and trade into 51.50 which we feel is the lowest possible interim support right now.
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