Equity markets retreated from a new peak last week, confirming resistance at a critical level. The market may move sideways over the next week, but there is a risk for volatility if not a firm move in either direction. The trouble is the CPI report, which is due on Wednesday. The CPI is expected to accelerate on a MoM and YoY basis compared to the previous month and keep the Fed on track to hike rates again this year.

The S&P 500's next move will be important for traders and investors. The summer session is over, and the fall trading season has begun. It is time for market participants to make their bets for the end of the year and next year, and what they do will be telling. A move higher is a sign of confidence, confidence that interest rates are tames and corporate growth can resume. A move lower would be a sign of fear, fear that inflation is not in control and the dreaded recession will finally materialize.