The bullish liquidity "dragged" the market higher since the Fed hasn't reduced its balance sheet yet. The bulls have been calling for peak inflation since October. With the recent collapse in commodities, there is a short term break for sure, but it doesn't mean inflation is over or that it won't go higher.
I believe this inflation is sticky and stealth and will resume if the Fed doesn't continue tightening. The perma bulls want inflation to magically go away on its own so the Fed won't tighten anymore.
Spiky price action was the mode today with sell offs and rallies on FOMC minutes. We had one of the lowest daily ranges on the year. Up until the last 1.5 hours, we were in the lowest daily range since December 2021. There were no trades the first 1.5 hours based on the narrow ranges and lack of activity in the market.
We were down on the day -$1,600 in the 200K and -$400 in the 50K Portfolio.
We are starting during a steep drawdown based on the hypotheticals in the Stock Index Portfolio 22 and if we don't get a bounce into the end of the week, we are pausing again. We are taking a low risk entry and risking the worse case drawdown which is about 1k per e-mini away. Drawdowns are calculated based on an end of day basis.
In recent weeks, we have seen drawdowns at the beginning of the week with gains toward the end of the week. One of the reasons we are starting here is based on the drawdown curve and the weekly cycle.
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