Equity markets rebounded on Thursday on hopes that inflation was subsisting but these hopes are likely misplaced. Today's PCE price index will tell the tale, and it is expected to confirm the acceleration of monthly inflation and that inflation is still running well above the Fed's 2.0% target. The S&P 500 action is also telling; Thursday's market closed with a gain but the candle formed is dark and consistent with consolidation within a bear market. Price action is still below the 30-day EMA, a sign that short-term traders are bearish on the market.

Next week could be another down week for the market. There is not much on the economic calendar, but a raft of earnings reports is due out from the retail sector. So far, the results are better than expected but point to slowing and contraction in 2023. More news of this variety will harm what are already declining estimates for the 2nd half of the year and add additional downward pressure to the S&P 500.