1. Executive Summary

1. Executive Summary • Current Status: The S&P 500 (SPX) is currently at a critical crossroads. Tonight’s release of the December CPI data serves as the "final starter pistol" to determine if the index can conquer the 7,000 milestone.

• Core Logic: While the market has priced in a steady decline in inflation, the focus now shifts to whether core inflation can surprise to the downside. Pre-market trading shows low-volume consolidation, reflecting extreme caution.

• Trend Outlook: High Volatility / Directional Breakout. Tonight's price action will set the tone for the remainder of January. A bullish CPI could trigger a short squeeze toward 7,100, while a bearish print may lead to a sharp correction.

1. Triangular Analysis • Macro: CPI is the crown jewel of tonight's session. Market consensus for the YoY rate is around 3.0%-3.1%. Additionally, anticipation for tomorrow's bank earnings is building. Macro sentiment is at a tipping point between "buy the rumor, sell the news" and a fresh rally.

• Technical: The index is currently riding the 5-day SMA (6,960), showing a perfect bullish alignment. However, the daily RSI is approaching the 70 overbought threshold. Technically, the market requires either a "Big White Candle" to confirm the 7,000 breakout or a "Flash Crash" to reset indicators.

• Micro:

• Gamma Profile: Call Open Interest peaks at 7,000, creating a massive "Call Wall."

• Volatility: The VIX has crept up to 16.5 pre-market, indicating that hedging flows are already in place. Micro-structure suggests a significant liquidity shock at the moment of the data release.

1. Key Support and Resistance Levels • Resistance (R2): 7,080 (Upside target on a significant CPI beat)

• Resistance (R1): 7,015 (7,000 psychological mark & Gamma resistance)

• Pivot (P): 6,970 (Pre-data price axis)

• Support (S1): 6,925 (Last Friday's low & 10-day SMA)

• Support (S2): 6,880 (Final bullish line of defense)

1. Actionable Advice • Intraday Strategy: Avoid the first move, trade the trend. The first 15 minutes post-CPI are dominated by algorithms. Wait for a confirmed break above 7,015 before going long, targeting 7,060.

• Hedging Advice: If holding heavy long positions, consider buying 6,900 at-the-money Puts as insurance before the release.

• Risk Management: If CPI surprises to the upside and price breaks below 6,925 on high volume, reduce exposure to below 30% immediately.