The Market Brief
Hey team. After a historic three-day surge in the S&P 500, the rally cooled off overnight, pulling back from the crucial psychological level of 6000.
Let’s recap yesterday’s session and look at what’s ahead!
Impact Snapshot
🟧 Consumer Sentiment - 10:00am
Macro Viewpoint
U.S. stock index futures dipped slightly on Friday, pausing after a strong rally driven by a decisive Trump victory and the anticipation of an interest rate cut, which had propelled S&P 500 futures past the 6,000 mark for the first time.
On Thursday, it crossed the psychologically significant milestone, fuelled by optimism over a more lenient regulatory environment under President-elect Donald Trump, combined with the boost in sentiment from anticipated lower borrowing costs.
The Fed lowered the benchmark rate by 25 basis points, with Chair Jerome Powell stating that the election outcome would not have a "near-term" effect on monetary policy.
The Fed Chair noted that the central bank would start assessing the impact on its dual objectives, stable inflation and maximum employment, once the new administration's proposals become clearer.
Prior Session Deep Dive
Nuances matter. Imagine if you were boarding a plane and the engineers who designed it overlooked some small differences in the components. Would it matter?
Most people want to hear where to buy and where to sell in a market. The reality is that markets are more complex than that, and the difference between being successful and unsuccessful in the markets is understanding and appreciating that complexity.
The market outlook we posted yesterday, along with the bullish scenario, emphasized the importance of recognising 'change' in the market.
Double distribution trend days are marked by a row of single prints, which serve as a significant short-term reference.
If the market fills these single prints during the overnight session or the U.S. session and enters the lower distribution range, it typically signals a short-term negative outlook.
However, if the market does not pull back to challenge those single prints in any way, there is no change in the uptrend, and continuation can be expected.
As anticipated in our market outlook, the trend continued, breaking and holding above the flip zone, which served as a stepping stone for the price to reach another historic level in the 6000s.
All of our market analysis is done on our exclusive Sierra Suite. Get it here.
If you want to learn about these advanced nuances on a daily basis and build a strong market understanding to anticipate moves that most traders miss, consider subscribing.
