Mid-week Market Update January 11, 2023

Waiting on inflation

This will be a very brief update on the indexes and market action. With the whole world awaiting tomorrow morning’s CPI announcement, digging into deeper analysis or looking further may not bear fruit as the whole situation could rapidly change.

The major indexes continue to improve so far in 2023 and prices have passed some of the tests we’ve been watching for (various anchored VWAP and support/resistance zones) while moving closer to the next ones (downtrend lines and 200-day moving averages.)

Looking at the small caps first—

IWM — Once again it is back to the downtrend line and 200-day MA. Probably not a coincidence that it was in a very similar position for the last CPI announcement on December 13, 2022. The reaction tomorrow will be telling.

click to enlarge

SPY — has managed to push through the confluence of congestion areas mentioned in previous articles and has some room above before the 200-day MA and downtrend line.

QQQ — pushed above the pivots and into its 50-day MA.

DXY — is still lower and there is still a clear path to $102.

Encouraging improvements have occurred in many beaten-down names and there is a feeling of optimism buzzing about.

With so much focus on every, single economic indicator and data point, the CPI may just be another thing to get out of the way.

Regardless, it’s an either/or announcement so positions will be lighter than usual.

Then earnings season will start Friday with some banks reporting.

IF we get positive CPI news, and IF that can be followed with some “better than expected” earnings news, the indexes could launch well into the next tests.

We shall see.

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***This is NOT financial advice. NOT a recommendation to buy, sell, or trade any security. The content presented here is intended for educational purposes only.

Andrew Moss is an associated member of T3 Trading Group, LLC (“T3TG”) a SEC registered broker/dealer and member of FINRA/SIPC.  All trades placed by Mr. Moss are done through T3TG.

Statements in this article represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.   

It is possible that Mr. Moss may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed.  This may reflect the financial or other circumstances of the individual or it may reflect some other consideration.  Readers of this article should take this into account when evaluating the information provided or the opinions being expressed.

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POSITION DISCLOSURE

January 11, 2023 4:00 PM

Long:  NVAX0113C14.5, TJX0217C82.50, UNG0113C13

Short: 

Options symbols are denoted as follows:

Ticker, Date, Call/Put, Strike Price

Example: VXX1218C30 = VXX 12/18 Call with a $30 strike