Indecision + CPI Data: Gap Fill Ahead?
Daily Plan for August 12th - Levels for SPX, ES=F, SPCX, all Magnificent 7
Major U.S. stock indexes closed slightly lower for a second consecutive day, pulling back from the all-time records set last week. Investor caution drove the session as markets awaited the key July Consumer Price Index (CPI) report on Wednesday 8:30AM EST, while continuing to digest ongoing geopolitical uncertainties, which as mentioned last Saturday, that’s the constant uncertain element in this market.
Hopes for a diplomatic resolution in Iran faded, raising concerns about international shipping lines and the potential impact of sustained energy costs on future inflation figures. Highlighting the reality of the crisis, the U.S. Energy Information Administration (EIA) officially raised its 2026 global oil price forecast to $87/bbl specifically due to prolonged shipping disruptions in the Strait.
Interestingly, the VIX closed in the red (-1.2%), something that we will consider below.
In the corporate side, Alphabet (GOOG) faced notable selling pressure, closing 3.6% lower. The central daily level shared yesterday worked as an initial alert of the bearish move, 354 was lost when the market opened, and for more risk tolerance, the first support level of 352 was breached with an impulsive move during the first fifteen minutes of the session, these pre-calculated levels posted last night for GOOG, acted as early warnings. Same case for SPCX (SpaceX) that is consolidating following an expected rally, the loss today of 136 as central daily level triggered the move toward 132 which was the anticipated first support level for the day and where the price closed today.
For the SPX, The session anticipated a narrow range based on the levels posted yesterday when the market closed, the Central Daily Level of 7,756 as the bullish-above/bearish-below marker flipped to resistance around 11AM following indecisive price action, the second support level at 7726 acted as the final structural floor for the day. The ES=F continue facing rejection at the monthly level of 7,799 for 6th day in a row, setting that line as a key threshold for bulls and bears.
Looking Ahead: July CPI Catalyst
All eyes are on the July Consumer Price Index (CPI) report scheduled for release at 8:30 AM ET tomorrow morning. It represents the single most crucial macro catalyst of the week, arriving on the heels of a cooling labor market and mixed signals regarding the Federal Reserve’s September policy action.
Economists project headline annual inflation will decelerate slightly to 3.4% (down from 3.5% in June). If the data satisfies or prints cooler than consensus, equities could see a bullish move. A hotter-than-expected print will likely spark a sell-off.
Below are the daily levels for tomorrow for the SPX, ES=F, SPCX, and the Magnificent Seven (TSLA, AMZN, NVDA, GOOG, AAPL, MSFT, META).
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SPX and ES=F: Daily Plan
During earnings season we studied the implied moves for the companies reporting earnings, the actual moves were very consistent to those expectations, let’s begin with implied moves for the index and the magnificent seven, see below that volatility is likely, and consistent with the compression in price action that we have seen during this week: