what HOT inflation means for markets
Afternoon team.
We saw a HOT inflation report today as CPI continues to be a pesky problem for the US economy.
We cover EXACTLY how we’re trading it along with the level inside today’s brief.
No time to waste, let’s jump in…
Impact Snapshot
February CPI annual inflation rises 3.2%, above expectations.
Market Evaluation
The stock market staged a recovery following the release of the latest inflation data, which failed to significantly sway expectations that the Federal Reserve will lower interest rates this year.
After a brisk January reading, the report adds to evidence that inflation is proving stubborn, which is keeping central bankers wary of easing policy too soon.
Other than the upcoming release of the producer price index, this is the last major inflation report the Fed will see before its meeting next week.
Markets Breakdown
This morning presented a perfect opportunity around our key points of reference shared over on X here.
A comment we’ve made was a correction around the settle after the emotional reaction of the CPI release.
We’ve talked about market behavior prior to key economical releases and how the market almost always is looking at a swing on one direction and an opposite reaction the other way.
This was the exact case today as the initial pullback of the market was met with a counter reaction to the upside.
Short covering is not new money buying the market. The upside reaction was fueled by market participants that were trapped shorting the range lows.
On the morning report we’ve highlighted that we wanted to see a correction towards the settle, despite the market being up 0.68% at the time of that post.
A correction towards the settle would mean wiping all gains made in the overnight session and that’s exactly what happened as the market pulled back towards that area.
We will monitor if the market has strength to find reasonable continuation or fall back inside the prior multi-day balance range
ES
The targets we look for until US close & Targets to pay attention Tomorrow:
Upside Levels: 5243/5260/5275
Downside Levels: 5170/5145/5115
That’s it for today.
We’ll see you again on Thursday!
-The QuantVue Team
Disclaimer: Futures and options trading carries a significant level of risk and may lead to substantial financial losses. The content provided in this newsletter is solely for informational purposes and should not be construed as a trade recommendation or financial advice. It is essential for readers to independently assess and make their own investment decisions, taking into consideration their personal financial situation and risk tolerance.