Key Inflation Data to Fuel Market Frenzy at Week's End
Hey team.
We’re back with another market report. The shortened week will end with a bang as all eyes will be focused on the PCE inflation tomorrow.
Let’s jump in and see what we’ll be looking!
Impact Snapshot
US first-quarter economic growth revised lower
PCE Inflation - Friday, 8:30am
Market Evaluation
U.S. stocks fell on Thursday while investors digested data showing the economy had grown slower than previously expected in the first quarter.
US grew at softer pace as both spending and inflation were marked down. Economic cooling could bolster the case for the Fed to start cutting interest rates this year.
Tomorrow’s PCE price index release will dominate market sentiment until next Friday’s jobs report.
The core rate is forecast to rise a milder 0.2%, which would be the smallest increase so far in 2024.
The Fed’s first-line inflation gauge is about to show some modest relief from stubborn price pressures.
Sierra Chart Suite
Gaining an edge in the market begins by adding context around momentum in order to stack confluences for higher probability entries.
Early this morning prior to the US open, we could spot some big seller stepping in the market at exactly 5272. Market retraced multiple times towards this reference with aggressive buyers getting absorbed by passive sellers, likely an iceberg placed by some big market participant. What this help us with is exercising caution for longs and finding a potential rotation to the downside, in this case, we’ve gotten an initial pullback of 0.36% with the market tanking later in the session.
Markets Breakdown
Our contextual analysis posted prior to the US open here was seeing a market that had more “room” to break to the dowsnide.
Using our Sierra Suite toolkit, we’ve spoted some unusual activity in the globex session of some strong market participants bulding their passive sell positions.
This gave added additional context around our expectations for this market and we were looking for a pullback towards our “magnet” pivot with a late breakdown at the close that did exactly that towards 5244. Update posted here.
When a market breaks from a balance range, it enters an impalance state and is seeking a new area to conduct 2-way trading.
The past two days market has been building value lower with no conformation of a balance range as of right now.
Heading into tomorrows session, the key inflaition catalyst at 8:30am will shape a volaitle session as traders digest the report heading into the open.
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Some references we’ll be looking at the overnight
Upside Levels: 5282/5296/5307
Downside Levels: 5232/5221/5205
That’s all we got!
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