Tomorrow coulkd be a key day for the stock market. We get Initial Jobless Claims, PCE inflation, and Chicago PMI data. The short term tend of the markets could fall into sharper focus as a result. The Federal Reserve is known to look at the Michigan and Conference Board surveys for insights, but PCE inflation in particular is seen as the Fed’s favorite inflation metric—and investors and the Fed still want to know if inflation has reached a peak. The Conference Board said that in the past month, purchasing intentions for cars, homes, and major appliances held “relatively steady—but intentions have cooled since the start of the year.” The report’s morning release turned the market around on the dime, reversing all major indexes that were up at least 1% after the open. Other analysts speculated that market liquidity has been low for some time now, and many investors are simply not looking to take on risk until conditions become clearer. We also have S&P500 portfolio rebalancing wrapping up for June and the second quarter on Thursday, that may introduce another level of volatility tomorrow. NN: i sure as hell do not want to be short the market tomorrow. Portfolio rebalancing is the old trick. Where the popular indexes simply throw out the losers and put in a new crop of winners. That is the reason they can tell the suckers the market always comes back after a sell off. Unfortunately the poor bastard whose IRA, 10k and retirement funds can not do that. They have to book the loses. That is why retirement funds are down as much as 50%. But for traders rebalancing is usually a market positive event. Because index funds have to buy the share of stocks entering the indexes they are suppose to track. As far as the PCE index its the Feds favorite way to look at inflation. My sniff is it will moderate giving hope to the markets that the FED will not beat them up to badly with massive future rate hikes. And as far as the Michigan consumer index, i feel that report will indicate the spending happy American consumer will continue spending, traveling and eating themselves into oblivion. At least for now.