8/10/22 Premarket outlook and Technical Analysis for day trading the SPY.

CPI day is here and here’s how I think it should play out. 8/10/22 Premarket outlook and Technical Analysis for day trading the SPY. Goodmorning traders, CPI Day is here and here is how I think it should play out. First thing to notice is that we started with an expected move of +/-8.825 for the week, two days have passed and today’s expected move is still over half the weekly’s expected move. This is saying we are going to have a heck of a range today (big move alert). Second, we had a gap down on internals from yesterday that we did not cover so there is still some upside risk coming into today. Technically, the weekly timeframe is the chart in control and based on that chart there appears to still be room to go up. Even though I see room to go up on the weekly it's not much which means the Room to go up could be filled by going sideways being that we are in consolidation mode or rest area for the weekly time frame. I am still not letting go of 418-421 level just yet. The Cpi Could be the boost or last gas effort to get up there. The daily chart is overbought but isn’t quite ready to fall out of bed just yet. Although it is headed down out of overbought territory it has a rest area or consolidation zone to go thru first and with the MACD still on the positive momentum and trend side it's likely we have a last-ditch effort waiting to go back to the upside before a complete breakdown. The 4-hour chart is next up in the rotation and is at the lower part of its range ready to cycle back up and retest the top of the most recent range. Now for CPI numbers, I said earlier this week it would be hard for me to imagine CPI having good news or good numbers. However, for the market to be good it need only be less than the 9.1 reading from the last CPI. Nobody ever seems to take into consideration the governments cheating by always moving the goal post. We will get a CPI number but it's not the real number because they are overlooking and taking certain things out of the latest calculations of CPI, go back and look at revisions and you will see how they keep raising numbers to be in line with Fed speak. Earlier this week I pointed out that momentum to the upside was fleeting. So, imagine a water hose spewing water and when you cut the water off it doesn't immediately stop spewing water it slows down. If you have the water hose pointed up it slows down and if you move the hose a bit it could still give you that last couple of good sprays before retreating back in the hose. This is where we are on the weekly and daily chart, down to the last one or two good sprays. Key levels to watch for ... Resistance (jack)412-413, (queen)414-415 and (king)416-420 area. Support (jack)411-410(queen)409-408 and (King)407-403. The main thesis is Bearish bias closing below 411.35 projected target/low of between 411-406. Alt thesis is Bullish bias closing above 411.35 projected target/high 414-420. The numbers were showing bearish thesis however whenever more traders are on one side and we get the opposite reaction that opposite reaction will be super explosive, and that is the set up for today. The current major channel we are in 397-416 and the next major channel up is from 416-425. Scenarios for the day: 1) Trend day up we open gap up and start with a fade back toward the previous close. We find support on or before the previous close then begin the uptrend for the morning. We find midday chop around either possible queen or king resistance. (Also notice that the gap is large enough to make it feel like a down trend has started but until we cross the previous close this is still an uptrend day type) or vice versa. 37% probability 2) Rounded reversal day type structure. We could get a continued push higher toward jack or queen resistance area and find midday chop around either queen or king resistance before spending the same energy we used going up to come back down the second half of the day or vice versa. 33% probability 3) Expanded Range Day structure We could look to set a decision area/ low boundary around the jack or queen support area before reversing back up. Or vice versa 30% probability