The cooler-than-expected Consumer Price Index (CPI) for November; set the stock market up for another upbeat session. The main indices all registered sizable gains shortly after the open.
Total CPI was up 0.1% month-over-month (consensus +0.3%) and core-CPI, which excludes food and energy, was up 0.2% (consensus +0.3%). Those monthly changes left total CPI up 7.1% year-over-year, versus 7.7% in October, and core-CPI up 6.0% year-over-year, versus 6.3% in October. The big rally effort was fueled by the notion that a welcome moderation in headline inflation should convince the Fed to temper the pace of its rate hikes and perhaps place a lower ceiling on its terminal rate.
Chart: QQQ 15 mins
From the tech side of analysis, what we really wanted was the market open somewhere around Monday's close, people noticed CPI results was confirmed the slowdown in core inflation, and the market pulled up and closed higher. (which can gave us a energy green bar on daily chart).
However, yesterday's pre-market trading was really optimistic and sent all indices going high, which created extension (gap) and met prior majority resistance at the market open. The question or concern about this kind of opening is, people are gonna ask "is CPI good enough to push the market break up the resistance? "
And then people realised "Oh, we have a FOMC result coming tomorrow! That's more important!"
Therefore, this "CPI Gap" has been treated like a "common gap" and has been filled during constant trading sessions.
But the good news is 284ish support has been held very well, and the market kinda close above this level.
For today, FOMC 50 points rate hikes is literaly done deal, how long ? and what's the final target is the key!
Total CPI was up 0.1% month-over-month (consensus +0.3%) and core-CPI, which excludes food and energy, was up 0.2% (consensus +0.3%). Those monthly changes left total CPI up 7.1% year-over-year, versus 7.7% in October, and core-CPI up 6.0% year-over-year, versus 6.3% in October. The big rally effort was fueled by the notion that a welcome moderation in headline inflation should convince the Fed to temper the pace of its rate hikes and perhaps place a lower ceiling on its terminal rate.
From the tech side of analysis, what we really wanted was the market open somewhere around Monday's close, people noticed CPI results was confirmed the slowdown in core inflation, and the market pulled up and closed higher. (which can gave us a energy green bar on daily chart).
However, yesterday's pre-market trading was really optimistic and sent all indices going high, which created extension (gap) and met prior majority resistance at the market open. The question or concern about this kind of opening is, people are gonna ask "is CPI good enough to push the market break up the resistance? "
And then people realised "Oh, we have a FOMC result coming tomorrow! That's more important!"
Therefore, this "CPI Gap" has been treated like a "common gap" and has been filled during constant trading sessions.
But the good news is 284ish support has been held very well, and the market kinda close above this level.
For today, FOMC 50 points rate hikes is literaly done deal, how long ? and what's the final target is the key!