Here is how we're trading inflation next week
Hey team.
A volatile week is ahead of us with the much anticipated CPI and PPI inflation.
Let’s do a re-cap of last week’s sessions and see what’s next for the market.
Impact Snapshot
PPI Inflation - Tuesday
Fed Chair Powell Speaks - Tuesday
CPI Inflation - Wednesday
Retail Sales - Wednesday
NY FED Manufacturing - Wednesday
Unemployment Claims - Thursday
Key Earnings: HD 0.00%↑ CSCO 0.00%↑ WMT 0.00%↑ BABA 0.00%↑
Market Evaluation
This week, the S&P500 index climbed by 1.9%, extending its winning streak for the third week in a row.
The surge was fueled by earnings reports surpassing forecasts and a growing optimism among investors for potential rate cuts.
Investor enthusiasm was kept in check after consumer sentiment data released Friday morning showed a big uptick in inflation expectations.
The Federal Reserve’s rate-cutting path will be further influenced by how much of a slowdown is seen in consumer spending and in hiring.
Next week, investors will receive key updates on inflation with the April PPI on Tuesday, followed by the April CPI on Wednesday.
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Markets Breakdown
On our morning report on Friday, we were looking for a potential pullback towards the settle to load safer long opportunities.
The session lacked momentum for continuation that experienced liquidations from an overly long overnight inventory that didn’t sustain any continuation above our key “flip” zone of 5263.
As we always say, when the overnight inventory is short/long, the odds favor a counter auction. If you don’t get a counter auction, then that’s a sign of strength for the short-term.
In that case, a counter auction to the overnight inventory would be a re-test towards the settle which was our initial idea we’ve shared.
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The market is setting itself up for some volatile sessions with the inflation numbers early this week. Usually market finds some balance in anticipation to key economical reports.
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The targets we look for until NY close & Targets to pay attention Tomorrow:
Upside Levels: 5272,5281,5296
Downside Levels: 5224,5214,5202
That’s all we got!
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