Index Drifts a Bit Lower Ahead of CPI

[ad_1]

This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier.

  • The S&P 500 Index drifted a little bit on Tuesday as we are awaiting the CPI numbers on Wednesday.
  • The CPI numbers will give us a bit of a hint as to where the Federal Reserve will be looking as far as monetary policy is concerned.
  • Keep in mind that the market is likely to see a lot of noisy behavior ahead of this announcement, and then most certainly after it.
Advertisement

Keep an Eye on CPI

The Core CPI is going to be the measurement to watch and is expected to come in at a 0.5% month-over-month reading. If it comes in hotter than that, the S&P 500 will almost certainly get sold into. If we break down below the 4100 level, it’s likely that the market could go down to the 4000 handle. The 50-day EMA is sitting underneath there and could offer support as well, but it’s closer to the 4900 level.

This is a market that I think will continue to see a lot of choppy behavior, with the 4200 level above could offering a bit of a barrier. If we were to somehow break above there, then it’s likely that we could go to the 4300 level. Keep in mind that we are at a major area of noise in the past, and an area where I think a lot of “market memory” could come into the picture. The size of the candle is neither here nor there, but the fact that we pulled back from a shooting star is not a huge surprise. I suppose you could take a look at this through the prism of a “hint”, as we had formed a hammer followed by a shooting star, and then actually had a bit of a body in this negative candlestick. However, if there is enough of a surprise from the announcement, that could cause the volatility to pick up in either direction.

When you look at the chart, you can see that I have attached a blue box where we had action previously, and I think this is what we are struggling with right now due to the “market memory” in that general vicinity. This is a market that continues to see a lot of interest, so it’ll come down to whether or not Wall Street thinks it’s going to get it’s fixed.

S&P 500 Index

Ready to trade the S&P 500 Forex? We’ve shortlisted the best Forex brokers for CFD trading in the industry for you.

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using xMetaMarkets services, please acknowledge all of the risks associated with trading.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

The information on this website is not directed to residents of certain jurisdictions such as United States, Canada, Iran, Cuba, France, and some other regions, and is not intended for distribution to, or use by, any person in any countries or jurisdictions where such distribution or use would be contrary to local law or regulation.

© 2018 - 2024 xMetaMarkets.com. All Rights Reserved.