Will Stocks Advance After Neutral Inflation Data?
Sunshine Profits | Dec 10, 2021 10:08AM ET
Stocks retraced some of their recent rally yesterday. Was it just a quick downward correction before another leg up?
The S&P 500 index lost 0.72% Thursday, as it retraced some of the recent advance and a rebound to the 4,700 level. This week the market retraced almost all of its late November to early December decline. Last Friday, the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. This morning, the index is expected to move higher following the Consumer Price Index release.
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Nasdaq 100 Bounced From 16,400 Level
Let’s take a look at the Nasdaq 100 chart. The technology index got back to the 16,400 level on Wednesday and yesterday it retraced some of its recent advance, just like the broad stock market. However, tech stocks are relatively weaker, as the Nasdaq 100 is still well below the Nov. 22 record high of 16,764.85.
Conclusion
The S&P 500 index will likely retrace its decline from yesterday. So the broad stock market may extend a short-term consolidation following the recent rally. There have been no confirmed short-term negative signals so far, and we may see an attempt at breaking above the 4,700 level following neutral CPI data release.
Here’s the breakdown:
- The S&P 500 is expected to open higher this morning and we may see a consolidation along the 4,700 level.
- We are still maintaining our short position from the 4,678 level.
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