The Dow Undecided Ahead Of CPI Release

FUNDAMENTAL ANALYSIS
Investors continue to be extremely cautious ahead of tomorrow's Consumer Price Index release (please see Option Trader HQ for stock market release calendar). Trading volume continues to drop as the Dow fails to close a new historical high for the 3rd straight day today. The Consumer Price Index tomorrow shall shed some defining light on the newly rekindled inflation fears. The Consumer Price Index (CPI) is a measure of the average level of prices of a fixed basket of goods and services purchased by consumers. This monthly figure is widely followed as an inflation indicator. The growing inflation fears along with widespread sentiments that it is about time rally ends, has contributed to decliners leading advancers by 2 : 1 today. There is no telling what tomorrow's CPI numbers might say so I hope everyone's at least delta neutral hedged by now.

TECHNICAL ANALYSIS
The Dow continues to move sideways as volume continues to drop. Seriously, I hope to see a decisive pullback more than a switch to a neutral trend like it is now. A decisive pullback usually lead on to a rebound and a continuation of the rally but a switch to a neutral trend usually leads on to a subsequent switch to a bear trend. That is the trend behavior of the market but I would not put the hammer down until I see actual evidence of where the market is heading. I have taken a portion of my money off the table and went delta neutral on the rest in order to hedge against risk.


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