Ahead of Yellen's Speech, Two Scenarios to Ponder

Pre-market weakness is attributed to the higher than expected Core CPI figure of +0.3% compared with expectations of 0.1%.

Actually, doesn't Yellen want inflation to creep up so she can raise Federal Funds by 25 bps? And don't investors want "normalization?"

If the above has a ring of truth to it, then the e-SPM should find buyers into this morning's minor weakness, especially ahead of Yellen's 1 PM ET speech just before the start of a three-day holiday weekend, which typically is a bullish- accented time for stocks.

If despite all the apparent positives the e-SPM is unable to rally today, and breaks key, near-term support at 2111-2110, then "scenario 2" looks increasingly viable: a rollover from the upper- channel boundary (2130/34) into a press towards the lower-channel boundary around 2070.