SPY at a Crossroads as CPI, PPI Drive Volatility
The bullish move is intact, but JPOW's criminal investigation will push it back.
Make sure to check chart below for key levels for $SPDR S&P 500 ETF Trust(SPY)$ .
$Cboe Volatility Index(VIX)$ just jumped 10%.
SPY is back at 690.
And this week is loaded with landmines.
CPI on Tuesday.
PPI on Wednesday.
OPEX on Friday.
This is not a coincidence.
Here’s what the data is quietly screaming:
• Core CPI is still running ~3% YoY, 50% above the Fed’s target sticky, not solved.
• PPI has fallen to ~2% YoY, down from over 11% in 2022 deflation at the producer level is real.
• Historically, when PPI drops faster than CPI, corporate margins compress and earnings volatility spikes within 1–2 quarters.
That gap matters.
It tells you inflation is easing upstream, but consumers are still paying downstream.
That’s how growth cracks.
The Fed is trapped between falling producer prices and stubborn consumer inflation.
Cut too early? Reignite inflation.
Hold too long? Break demand.
Markets hate that kind of math.
SPY is now pinned between 695 resistance and 688 support.
Above it, 700 opens fast.
Below it, 685 comes quicker than bulls expect.
This week isn’t about direction.
It’s about confirmation.
CPI and PPI will decide if this is just noise…
or the start of a repricing.
Volatility doesn’t arrive loudly.
It builds while everyone argues.
Trade small.
Wait for confirmation.
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