Trading Plan for Wednesday, April 10, 2024
Trading Plan for Wednesday, April 9th, 2024
Market Sentiment: Volatile and uncertain. CPI came in hotter than expected, increasing the likelihood of continued aggressive actions by the Federal Reserve.
CPI Data and Impact:
CPI rose 0.4% for the month, resulting in a 12-month inflation rate of 3.5%, surpassing expectations.
Core CPI also accelerated 0.4% monthly and 3.8% year-over-year, exceeding forecasts.
This suggests inflation remains persistent and could pressure the Federal Reserve to maintain a hawkish stance with higher interest rates.
Key Supports
Immediate Supports: 5256, 5246-50 (major), 5230-34 (major), 5221, 5213 (major).
Major Supports: 5207, 5203, 5192 (major), 5181, 5171, 5162-64 (major), and many more.
Key Resistances
Near-term Resistance: 5262 (major), 5274-76 (major), 5288 (major), 5302 (major), 5351-54 (major).
Major Resistances: 5312 (major), 5374, 5386 (major), 5406 (major), 5441 (major), and more.
Trading Strategy
CPI Volatility: The hotter-than-expected CPI numbers will likely continue to generate market volatility. Exercise extreme caution and adapt your trading accordingly.
Focus on Reactions: Patience is essential. Look for failed breakdowns and reclaims to identify potential entry points.
Long Opportunities: Prioritize reclaims over direct bids at major supports. Consider longs if major supports like 5246-50, 5230-34, or 5213 hold after potential dips, but only AFTER a failed breakdown and convincing reclaim. Deep dips to 5162-64 may warrant small knife-catch longs.
Short Opportunities: While counter-trend shorts are generally unadvised, those inclined may try shorts at 5302 and 5350, BUT with enhanced caution as even major resistances can be blown through after news events like CPI.
Bull Case
Bull Flag in Play: The bull flag with support at 5191 and resistance at 5274-76 remains relevant, but the hotter CPI makes a clean breakout less likely.
Holding Support: Bulls could still maintain control if 5230-34 holds any dips or if lost levels are quickly reclaimed within approximately 15 minutes.
Bear Case
Breakdown Signals: A failure of the bull flag support at 5191 (initiated) increases the likelihood of a more significant bearish move. As with ALL breakdowns, be wary of traps – look for a bounce/failed breakdown first, then consider shorts at 5189 for a move down the levels.
Increased Fed Pressure: The hotter-than-expected CPI reading strengthens the case for the Federal Reserve to maintain its aggressive stance on interest rates, potentially leading to further downward pressure on the market.
News: Top Stories for April 9th, 2024
CPI Impact on Markets
Hotter-than-expected CPI raises concerns about inflation and the Federal Reserve's potential actions.
Market volatility surges as traders reassess expectations.
Treasury Rates & Fed Policy
US 10-Year Treasury yield could hit 4.5% on inflation concerns.
Fed Chair Powell emphasizes need for inflation cooling evidence before rate cuts.
Bowman suggests further rate hikes may be needed if inflation stalls.
Individual Stocks
Tech and growth stocks may be particularly vulnerable to rising interest rate fears.
Defensive sectors such as consumer staples and utilities could receive favor.
Reminder: The CPI report has fueled volatility and uncertainty. Prioritize risk management, react to price action, and adjust your trading strategy accordingly!
Market Sentiment: Volatile and uncertain. CPI came in hotter than expected, increasing the likelihood of continued aggressive actions by the Federal Reserve.
CPI Data and Impact:
CPI rose 0.4% for the month, resulting in a 12-month inflation rate of 3.5%, surpassing expectations.
Core CPI also accelerated 0.4% monthly and 3.8% year-over-year, exceeding forecasts.
This suggests inflation remains persistent and could pressure the Federal Reserve to maintain a hawkish stance with higher interest rates.
Key Supports
Immediate Supports: 5256, 5246-50 (major), 5230-34 (major), 5221, 5213 (major).
Major Supports: 5207, 5203, 5192 (major), 5181, 5171, 5162-64 (major), and many more.
Key Resistances
Near-term Resistance: 5262 (major), 5274-76 (major), 5288 (major), 5302 (major), 5351-54 (major).
Major Resistances: 5312 (major), 5374, 5386 (major), 5406 (major), 5441 (major), and more.
Trading Strategy
CPI Volatility: The hotter-than-expected CPI numbers will likely continue to generate market volatility. Exercise extreme caution and adapt your trading accordingly.
Focus on Reactions: Patience is essential. Look for failed breakdowns and reclaims to identify potential entry points.
Long Opportunities: Prioritize reclaims over direct bids at major supports. Consider longs if major supports like 5246-50, 5230-34, or 5213 hold after potential dips, but only AFTER a failed breakdown and convincing reclaim. Deep dips to 5162-64 may warrant small knife-catch longs.
Short Opportunities: While counter-trend shorts are generally unadvised, those inclined may try shorts at 5302 and 5350, BUT with enhanced caution as even major resistances can be blown through after news events like CPI.
Bull Case
Bull Flag in Play: The bull flag with support at 5191 and resistance at 5274-76 remains relevant, but the hotter CPI makes a clean breakout less likely.
Holding Support: Bulls could still maintain control if 5230-34 holds any dips or if lost levels are quickly reclaimed within approximately 15 minutes.
Bear Case
Breakdown Signals: A failure of the bull flag support at 5191 (initiated) increases the likelihood of a more significant bearish move. As with ALL breakdowns, be wary of traps – look for a bounce/failed breakdown first, then consider shorts at 5189 for a move down the levels.
Increased Fed Pressure: The hotter-than-expected CPI reading strengthens the case for the Federal Reserve to maintain its aggressive stance on interest rates, potentially leading to further downward pressure on the market.
News: Top Stories for April 9th, 2024
CPI Impact on Markets
Hotter-than-expected CPI raises concerns about inflation and the Federal Reserve's potential actions.
Market volatility surges as traders reassess expectations.
Treasury Rates & Fed Policy
US 10-Year Treasury yield could hit 4.5% on inflation concerns.
Fed Chair Powell emphasizes need for inflation cooling evidence before rate cuts.
Bowman suggests further rate hikes may be needed if inflation stalls.
Individual Stocks
Tech and growth stocks may be particularly vulnerable to rising interest rate fears.
Defensive sectors such as consumer staples and utilities could receive favor.
Reminder: The CPI report has fueled volatility and uncertainty. Prioritize risk management, react to price action, and adjust your trading strategy accordingly!
