Yesterday's trade was interesting and kinda like what we expected when we discussed during our Stream before the market opened. Fed Chair Jerome Powell back in the hot seat on Wednesday, delivered his second day of semi-annual monetary policy testimony before the House Financial Services Committee. Markets were already jolted in the previous session following comments that suggested the central bank could put an end to its recent shift towards more gradual tightening. Stocks ended with a mixed performance on Wednesday, stabilizing after a sharp decline the previous day, as Wall Street comes to terms with the "higher for longer" intentions of the Federal Reserve.
And from the tech side of analysis, the market is already priced this "higher for longer" intention of the FED. and 3980ish has been tested again while Powell gave his testimony, the trading vol was significantly increased at market close. This gave a "hammer" doji on the daily chart, and in 15 mins time frame, the SPX was a little bit extended, therefore, it may experience some correction during today's trading session, but the overall trend still remains unchanged.
However, instead of directly pulling up, the market needed time to digest ongoing commentary from Federal Reserve Chair Jerome Powell, who alluded to the Federal Reserve ultimately having to push interest rates higher than previously anticipated and for longer along with robust economic data that creates a double-edged sword for investors.
Investors are now looking ahead to the government's employment report, due out on Friday. Ahead of this key release, payroll processor ADP announced its private payroll data for February, with the figure showing 242K additions in the month, beating expectations.
For the recent market condition, I think the best way for investors to approach this is to focus on companies that would be most resilient to persistently high-interest rates. Examples here include some cheap chip firms, financial firms, as well as energy/utility companies. As a hedge against inflation, precious metals might also work, maybe the recent strong dollars left some investors confused about precious metals. But as a hedge against inflation, GOLD is still holding above $1800ish/oz, it might trade back to $1770/oz in the mid-term, but for the short-term, it still doesn't give any sign of breakdown.
I will be holding another LIVE STREAM on Friday at 6:40 AM EST @TradingView, feel free to join my market discussion.
Please feel free to express your ideas and thoughts in the comment section.
