Stocks to rally after CPI, but will they reach new highs?
|The S&P 500 bounced on Monday, and today it’s going to open much higher after the CPI data. Will the uptrend resume?
The broad stock market index gained 1.43% yesterday, as it went the highest since last Tuesday. Last week on Monday it reversed lower after a better-than-expected ISM Services PMI release, and on Tuesday it was as low as 3,918.39 (going down from its last week’s local high of 4,100.51).
This morning the S&P 500 will likely open 2.7% higher following lower-than-expected Consumer Price Index release. The market will be now waiting for tomorrow’s FOMC release. It still looks like a weeks-long consolidation within an uptrend. However, last week on Tuesday the index broke below its two-month-long upward trend line, as we can see on the daily chart:
Futures contract rallies to new high
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the previous local highs on the inflation release. The support level is now at 4,050-4,100, marked by the recent resistance level.
Conclusion
Stocks are about to open much higher this morning on lower than expected consumer inflation release. So the S&P 500 index will likely get back above the 4,000 level. Tomorrow we will have the important FOMC release, and there will likely be even more volatility.
Here’s the breakdown:
-
S&P 500 index got close to the 4,000 level yesterday, and today it will break above it.
-
Stock prices may resume their two-month-long uptrend.
Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.