 Hey everyone, this is Mike Kramer of my capital of the weekly check-in today is August 8th It's around 5 o'clock New York time US markets are closed So all eyes will be turning towards the big US CPI report this Thursday August 10th at 8 30 a.m You're also going to be getting initial jobless claims that morning as well Which have been something the markets been paying a lot of attention to as well CPI month-over-month headline looking for 0.2 percent in line with last month's estimates CPI X food and energy up 0.2 percent in line with last month CPI year-over-year is expected to accelerate to 3.3 percent from 3 percent last month CPI X food and energy expected to rise 4.7 percent down to 10th from last month So it's interesting that I noticed at the CPI year-over-year estimate for the core was that you have the average just above the 4.7 so you want to keep an eye on this number and The other point being is that the number one rated analysts From TD securities sees it at a 4.8. Everyone else is at 4.7 So always worth noting when the number one rated analysts You know kind of is a little bit ahead of the a little bit above the crowd So something to at least be aware of when we look at pricing and swaps At least based off of inflation swaps. We're looking for a 3.2 percent number That would be a tenth lower than the estimates for 3.3 percent from the analysts What is important to note is that currently we're looking for a further acceleration and CPI in August with the rate climbing to 3.6 percent and so this number here potentially represents Has some level of importance not so much just for July But where the market's going to then see August as a result because if the number should come in it What analysts are looking for a 3.3 percent? Does that push the outlook for August higher if it should come in higher than 3.3 percent? You know does that push August even higher and obviously if it comes in it as the market's expecting probably These numbers don't change very much and of course you can see the September number at about 3.4 percent So the next couple months are going to be potential for CPI headline to Re-accelerate before coming back down later in the year. So this is something to pay attention to Again, one reason why you're seeing these adjustments higher is because you're seeing oil prices getting very close to Breaking out of what's been a trading range at around 83 dollars now for some time And if you were to see oil break above this 83 range It could result in oil rising to the low to the mid 90s And that could certainly put even more upward pressure on these inflation outlooks because again, these are headline Inflation before we get into too much details Regarding the the technicals and the trends and such it's worth pointing out that number one We have a couple of things going on here The first thing that's going on here is that today we tested the lower Bollinger band So we went from a condition of being Severely overbought to a condition now of at least being oversold from the standpoint of touching the lower Bollinger band Additionally, we are now very getting very close to the 50-day moving average Which could also be another support region and third when we look at the 10-day exponential moving average You can see that this has been a very big support level for the NASDAQ as it's been rising here It served as support. You can see back here though. It clearly gap below And is now trading Firmly below the 10-day exponential moving average So this 10-day exponential moving average as you can see on Friday Acted as a resistance level and this is something to take note of Especially as we move forward for tomorrow and into the CPI report on Thursday where this 10-day exponential moving average is because again, this could act as Either a resistance level or if you were able to gap above it could be an indication that there has been a change in Trend to being more bullish from Bearish after this 5% or so decline that we've seen additionally on top of these moving averages and such you can see that the the NASDAQ is now Coming up along this low lower trend line which also coincides with the 50-day moving average So this 50-day moving average can serve as support from two standpoints number one It serves as a standpoint from where the 50-day moving averages But it's also a representation of where this this trend line is at least off of this March 13th low and So if you were to see a gap below this trend line tomorrow or Thursday It likely sets up a challenge and a test of this lower trend line down here at around 14,000 14,130 or so Secondly, there's also some more significance up at these levels as well because here you can see that there's a Was a support resistance zone back from the June 15th highs you can see we tested it once tested it twice Finally when we got through we got that big rally Then we came back down tested us to support a couple of times and as of today We gapped below that trend line and you can see we even came back up to it, but we didn't go through it So this is also another big level here at 15,300 Ideally if you're bullish you want to see the index Gap above these levels take out this high at around 15,400 fairly quickly and easily tomorrow You want to be able to see the 10-day exponential moving average also be taken out at around 15,000 call it 450 And that could lead to a further gap fill may be back towards 15,680 or so, but barring that if you don't get those Conditions met it seems more likely than not that if this breaks We're looking at a much deeper decline Momentum has clearly shifted and rolled over from bullish to bearish. You can see the bearish Divergence here and here you can also see the breaking of the uptrend in the RSI also signaling a change in trend When we move over to the Dow Jones industrials We can see that the Dow Jones industrials have this big, you know, 13 14-day advance that finally broke We came back. We surpassed the highs But again, we then now have traded lower off of those highs Again, basically what we're looking at right here is this support region that comes into play around this 35,000 area so that's you know worth noting because again after 35,000 We're talking about going back to 34,600 and that's an important level because this was a level that You know, we struggled with for some time That was the big level that we tested back in the middle of June We weren't able to get through we tested it here and begin the last year So this is a big level because if we come back to this 34,600 region and if for some reason let's say we end up and we end up failing and trading through it That's an indication that there's probably more selling to come So this is a big level of support that really needs to be watched Especially tomorrow and going into Thursday likewise if you take out this high at 35,000 for 75 There's a chance that you can revisit the recent highs at 35,600 You know and when we take a look at the the Dow just like we did on the Nasdaq You can see that we're not we didn't reach as severely overbought conditions The Dow Jones right now is just flirting with the 20-day moving average The Dow was also hasn't really firmly broken the 10-day exponential moving average So all in all you could still argue that the Dow is still has a bullish bias to it again Based off of where we are right now based off of these cycles If you see that these levels start getting taken out and this level down here around 35,000 is challenged tomorrow It's likely going to indicate. We're going to see lower levels 34,000 34,400 34,500 like I previously mentioned When we look at some other things going on and another reason why we may be looking at a scenario where we begin to see US markets struggle is because number one we've seen the dollar begin to re-strengthen The dollar has started to strengthen against the euro. We can see that there's a a trend line right here Which is of importance. You can see that the the dollar is is Basically the euro is sitting on this trend line There's also another trend line that's already been broken in the euro, which is at this point in time here So we have you know this sort of long-term Strength right now in the euro which suggests that this is a very big level while on the short term We've seen already a breakdown so if we're going to see again the euro sort of regroup itself and Find that this is going to be a level of significance We could rally back to this trend line here at one point at 110 Likewise a break of this trend line at 109 and a half call it probably leads to a further decline Backtown towards 108 and a half and again We can see that the euro got extremely overbought from a technical basis We can see that the euro is now trading well below the 10-day exponential moving average that moving average has been acting as resistance And so that means that to get to get the euro moving higher. We need to see that level broken We can see that the euro also got extremely overbought we're not quite oversold because we haven't really hit that lower Bollinger ban and The euro is also, you know testing the 50-day moving average So there's a lot of things going on right here that suggests that perhaps You know this is a very big level and a very big potential change in trend for the euro if this if this all starts to break Down and so that that makes, you know, this 108 and a half region rather critical Because if we break these levels here, we test 108 and a half. We break that we're looking at 105 Likewise upside is going to be difficult right now with 110 80 or so being the big level to watch Additionally, we've seen something similar in the British pound where again, you can see that Here's your your sort of medium term uptrend. We've come up to that We've broken that uptrend. We came back up to it retested it and at least to this point we failed We also have seen that momentum has started to shift from the pound from being bullish to bearish with this breakdown in the RSI we can see that the 50-day moving average again is a big level of support at this region that is now acting as Resistance when we look at the 10-day exponential moving average firmly trading below it now It has also been a resistance level and like the euro like the Nasdaq The British pound got to be overbought as well tested the lower Bollinger ban already Came back up got that bounce and it almost looks as if now the pound is back to potentially going lower Because it's becoming a little bit more clear that you know these central banks the BOE the ECB and the Fed are all Getting closer to their terminal rates who finishes, you know first May not matter But what is becoming also clear is that the US is a little bit in a stronger position from an economic standpoint and that's favoring You know moves back into the dollar not only that but and if we just look at your Positioning from a standpoint of where are where is all of the you know? Where is all the money right from look at your euro future positioning? You can see that very very net long right not much really position here from from a short position It looks like from a non-commercial position Everyone right now is really net long the euro and that means that the euro going lower is probably Going to be the pain trade here if you start seeing it break down And so again that that likely means that this dollar index which appears to have actually shown signs of Breaking out just more recently today could maybe be back to climbing towards 103 and a half And finally if we just take a look at the yen you can see that the yen You know got a really big boost whenever one's looking for the BOJ to lift the yield curve control Which they certainly did although they didn't do it I think in the manner that's really created the most potential upside to the to the to the 10-year JGB yet You can see that there's been an initial surge in the JGB but the but very quickly the BOJ has come in and Already started doing bond buying operations to kind of keep the 10-year from getting going too far too fast And that has allowed basically some of the strengthening We see in the end to be unwound and you're starting to see again here You can see there was rumors and speculation about it Then we started to come up then we came into the meeting we sold off the yen strengthen pretty materially We got down to this 137 area now We're moving back up and looks like we're getting ready to test this resistance zone Here at around 144 to 145 Again, if you see the end continue to move up past 144 and a half to this 145 region. It's probably got a while a ways to go higher You couple a yen weakening with a euro weakening with a pound weakening that means major US dollar strength Again, that's going to be negative for stocks overall That's also going to be negative for the S&P 500 which you can see has broken an uptrend has Also has a little bit further to go in terms of the 50-day moving average has broken some already big support levels so far It's holding on to this support level around 44 60 But if we look at the Bollinger band also tested the lower Bollinger band the 10-day exponential moving average again Has started to serve as resistance. You can see that there's also a bearish divergence, which is formed on the RSI So overall there just seems to be potentially big changes in trend coming in this marketplace and it could mean Stronger dollar weaker yen weaker euro weaker pound weaker weaker US equities as the dollar Strengthens and financial conditions really start to tighten again. That's something that we haven't seen now probably since SVV the collapse of SVB. Anyway, that's all I have best of luck this week. Bye