Yesterday's trade shaped up to be decidedly positive, building on Tuesday's late afternoon rally. The main indices experienced modest turbulence, though, at the start of the session, but they maintained a positive posture even at session lows. Broad buying interest, along with leadership from the mega cap space, kept the S&P 500 above its 50-day moving average (3,908). The major indices settled into a fairly narrow trading range for most of the session until buying interest picked up steam in the afternoon trade, leaving the indices at their best levels of the day by the closing bell. This upside move led the S&P 500 to push past the 3,950 level.
From tech side of analysis, market open high around 3930ish, what I expected was market trace back a little back and found support around 3900ish, even retest 3880ish. However, instead of price correction,the market choose to do time correction. Break up the 3950ish short resistance and close around 3960ish which is only 20 points left for uptrend comfirm point.
As all eyes on CPI reports, this CPI report may show some moderation in inflation. That could give the Federal Reserve room to slow down its pace of rate hikes while buttressing expectations that the central bank can downshift to a 25 basis point hike at its next meeting in February. Boston Fed president Susan Collins in an interview said that returning to a 25 basis point hike would help the Fed to assess the effects of the tightening it has already implemented.
According to the CME FedWatch tool, markets are pricing in a 79.2% probability of a 25 basis point hike at the February meeting, with a 20.8% probability of a 50 basis point hike.
For today, I think market already priced in the best scenario that could happen. Therefore, even though the CPI report might give a positive result, I still expect the market to trace back to the EMA area. Right now, the market is extended from 15 and daily EMAs which I feel even the most positive buyers might hold their pocket for trace.
Please feel free to express your ideas and thoughts in the comment section.