SPX daily chart

Last week's 4.1% rally in the Nasdaq has continued today with the index up 1.1%. The S&P 500 is keeping pace up 1.1%. European equities have extended gains close to 2% with some indexes up 2.5%.

The market is in a good mood but it all hangs this week on Tuesday's CPI. The consensus on the headlines is a deceleration to 8.1% y/y from 8.5% but an acceleration on the core to 6.1% from 5.9%.

I tend to think that core matters more now but that's an interesting debate.

In terms of the technicals, the S&P 500 is making some progress to get back to 4200 as the first marker but the big test will be the 200-day moving average, where it stalled out last month.