Weekly Plan 3/11
The most important CPI of our lives(just kidding)
Hello traders,
On Friday we finally saw some selling on the indices post 10am and both Nasdaq and S&P ended deeply red.
I had an idea that above 5181 there was no need to be short as spooz could easily tag 5220-25 on the buying pressure that was evident on the tape.
Once we lost 5181, the short setup was valid and we got our coins.
Low of the day was within 6 ticks of our bear level and that netted points to subscribers as well.
Looking forward to this week, we should see some dealer positioning for CPI tomorrow and then post CPI, we have a nice little opportunity of about 60-80 ES points based on levels and directionality of the move.
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Interesting remark from Joe Biden this past week after the market close.
The tweet from Brian Sullivan references a statement made by President Biden in Pennsylvania, indicating that the entity responsible for setting interest rates (implicitly the Federal Reserve) is expected to lower them. The mention of lower interest rates can have significant implications for the financial markets, especially ahead of key economic data release of the Consumer Price Index (CPI) print.
Lower interest rates can stimulate economic activity by making borrowing cheaper, which can lead to increased spending and investment. In anticipation of a CPI print, if investors believe the CPI will show inflation is under control or decreasing, the prospect of lower interest rates could boost market sentiment. This is because lower inflation might give the Fed more room to lower interest rates without stoking further inflation.
For the markets this week:
Equities - Stocks might rally on the news and anticipation of lower interest rates, as it reduces the cost of capital and can increase corporate profits. Especially growth stocks, which are more sensitive to interest rate changes, might see some gains.
Given these dynamics and based on the anticipation of the upcoming CPI print, if the data supports a cooling inflation environment, markets might react positively, reinforcing expectations that the Fed could indeed lower interest rates. However, it's essential to monitor the actual CPI data closely, as higher-than-expected inflation could complicate the Fed's decision-making process and market reactions.
Levels for this week (Until Tuesday)
Weekly levels to be used until the CPI report.