SPY Normal trading is back in full swing this week after last week’s shortened holiday schedule. Despite last week’s low trading volume and momentum, traders managed to hold the markets near their recent highs, maintaining the overall bullish trend. There are some key events and reports expected this week that will test the strength of the bulls at these highs, the most important being the Personal Consumption Expenditures (PCE) report. The PCE index will provide markets with the latest inflation numbers like the CPI did a few weeks ago, but this is more important because it is The Fed’s preferred inflation gauge. The Fed is expected to hold their FOMC meeting in about two weeks, so the results of The...
SPY Chart done on hourly timeframe. The stock market posted its third consecutive positive week last week after a better than expected inflation report. The Consumer Price Index (CPI) reflected consumer prices rose 3.2% in October, decreasing from the 3.7% in the previous month. Market were alleviated to see inflation moving closer to The Fed’s 2% target rate as it could mean no further interest rate hikes are necessary. Apart from inflation data, there were several retail related reports last week, including earnings from Target, Walmart, and Home Depot. Earnings from these big-box retailers were positive, but their forward guidance was mixed, citing weaker than expected consumer spending activity. Their comments were reinforced by the monthly retail sales report, which...
SPY Chart done on hourly timeframe. Markets roared higher last week despite Fed President Jerome Powell’s hawkish comments in regard to fiscal policy. Prior to his speech, markets were on track to book their longest winning streak in two years, but the speech caused a sharp drawdown that was quickly bought the next day. The sharp and intense buying exemplified just how powerful buying momentum is right now, and it could signal what’s to come next week, but there will be multiple major tests. The first and most important will be the consumer price index (CPI) report, which will give an update on inflation levels for October. Later in the week we will see the producers price index (PPI) report,...
SPY Chart done one hourly candles. Bullish activity was the strongest we’ve seen in months last week as buyers stepped in following multiple positive catalysts. First, labor market data indicated a rise in unemployment from 3.8% to 3.9%, which is ironically good news since higher unemployment leads to less consumer spending power, and that helps fight off inflation. The Federal Reserve was very clear early on in 2022 that in order to fight off inflation, there will likely need to be an uptick in unemployment, which is exactly what’s happening now. Another catalyst for last week’s move was The Fed’s decision to hold interest rates steady at 5.5%, making this the second FOMC in a row where they keep rates...
SPY Chart done on hourly timeframe. Next week is a pivotal week for markets as traders and investors prepare for major earnings, monetary policy updates, and labor market data. Last week’s market sell-off brought the S&P closer to correction territory, despite the fact that many large cap tech companies beat earnings expectations. This week’s earnings focus will on Apple, AMD, McDonald’s, AirBnb, and a few other notable names, but Apple’s earnings are especially in focus since it is the most valuable public company, and an earnings miss could be detrimental. The Federal Reserve will meet this week for their two day FOMC event and will decide whether to raise interest rates or keep them as is. The Feds hiked interest...
