Market Journal: Post-CPI Update

Discussion

As discussed in last night’s (this morning’s) EOD update, event VOL is coming off sharply this morning in response to an in-line CPI report, and a sharp move lower in HY CDX confirms. I believe we have likely seen the lows for this correction until Powell on August 25, but it’s going to be choppy. The mechanical, VOL-flow fueled squeeze period is over, and bulls and bears are likely to be tested along the way into EOM. Then, as discussed ad nauseam, downside opens up into September/October.