Fighting it Out in the Box

The violent price swings with an uptick in volatility that we noted yesterday is all the more pronounced today, with another sharp downside reversal earlier in the broad market after this morning's inline but still extremely hot CPI print.

This evening we hear from Oracle, a legacy tech play heavily-involved with AI. ORCL is back below its 200-day moving average after its latest rally. But earnings should dictate the next move from here. And then tomorrow morning we get the Producer Price Index, which is often seen as leading the CPI. Thus, if inflation is on the upswing, as I suspect, we should see it in the print. 

As far as relative strength names, refinery stocks like Valero, below on the daily chart, and some agribusiness plays like ADM are duking it out in "the box (also known as the interrogation room in Homicide: Life on the Street)," meaning a sideways base in the context of a clear uptrend--You can see as much on the VLO chart. 

In a market running short on logic, these stocks and sector exuding relative strength actually makes a ton of sense given the happenings in Iran. So, let us be grateful for that. 

Overall, bulls seem to be sloppily losing their grip on a market they have had a stranglehold on for quite some time. You cannot be surprised they are reluctant to give up the initiative, which is a major reason why these abrupt, violent swings are playing out the way they are.