Mind the step
Speculation is running hot. One month out from the next Fed meeting, the odds are neck and neck: a hold at 54%, a rate hike at 46%.
Weaker-than-expected US jobs numbers just before the weekend gave the hold scenario a boost. Now it has one last hurdle to clear before crossing the finish line in front: Wednesday’s inflation figures.
It wouldn’t take much, just a CPI reading slightly below expectations, for Kevin Warsh to extend his wait-and-see stance, push back the rate hike, and blow away the last barrier holding back the market’s enthusiasm.
But as always, when expectations run this high, the smallest grain of sand could throw everything off course and turn the bull run dream into a rout.
My trading plan
Stopped a few dozen points short of the symbolic 55,000-point mark, last week’s fierce buying push is losing steam and looks more and more like a bullish capitulation, the kind you see at a market top.
Against this backdrop, I’ll be watching first and foremost for bursts of enthusiasm that could open up short-trade opportunities, with buyers’ stop-losses in my sights below Friday’s low at 53,882 points.
Follow my educational trading signals.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
Running on fumes
Glimmer of hope
Chasing the top