The News
The Key Reversal Day leads to some downside follow-through today as stocks take a break. Three of the four major indexes finished in the red, and only the Dow Jones Industrial Average was green on the day.
The key market drivers this week will be inflation reports in the form of CPI tomorrow morning and PPI on Thursday.
The Markets
The storyline remains the same. Light inflation data increases the likelihood of Fed Funds rate cuts potentially delivering more of them and starting sooner.
This, of course, would take stocks higher. We’ll see what the numbers show in the morning.
On the flipside, stocks are showing signs that some rest and a pullback are due, as detailed in Friday’s article, Key Reversal Day.
We closed last week by noting the potential change and raising the caution level. Today’s dip, though mild, confirms the chart patterns and leads to the question, “How low could we go if inflation data is unfavorable?”
Friday’s look at the weekly charts mapped out levels on that timeframe. Today, we’ll go back to the daily charts for a closer view.
The Charts
SPY was down for the day but closed above the 8-day MA and the $510.13 pivot. Lower, there is an AVWAP, then the 21-day MA near $505, and another pivot at $503.50.
QQQ had a very small range today and closed with a spinning top doji candle just above the 21-day MA. Indecision. There is a gap below the $433.71 pivot extending down to $425.70. A swing low AVWAP and the 50-day MA are also near the bottom of that gap.
IWM continues to struggle and closed back below the 8-day MA and the $205.49 breakout level again. The 21-day MA near $202 is the next potential support. If it trades below that level and stays there, the breakout would be considered a failure, and more caution would be prudent.
DIA, after weeks of quietly drifting higher, the Dow 30 has now quietly drifted lower for several days. It was the one positive index for the day. However, its 8-day MA is close to crossing below the 21-day MA, indicating failing momentum.
TLT did continue to hold above all of its moving averages.
DXY put in a hammer candle near previous support, and today’s action confirms the reversal pattern. Prices are still range-bound for now, though, and not presenting a headwind for stocks.
BTCUSD is the runaway story, as breakouts have led to consolidations, which have led to more breakouts. Momentum is strong. The weekly breakout looks to be ‘for real,’ and there is plenty of clean air overhead.
The Closing Bell
That’s it for today.
CPI in the morning, followed by PPI on Thursday.
Here’s the calendar for the rest of the week.
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The Disclosures
***This is NOT financial advice. This is 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”), an SEC-registered broker/dealer and member of FINRA/SIPC. All trades placed by Mr. Moss are done through T3TG.
Statements in this article represent that person’s opinions only and do not necessarily reflect those of T3TG or any other person associated with T3TG.
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 consider this when evaluating the information provided or the opinions being expressed.
All investments are subject to the risk of loss, which you should consider in making any investment decisions. Readers of this article should consult with their financial advisors, attorneys, accountants, or other qualified investors before making any investment decision.
POSITION DISCLOSURE
March 11, 2024 4:00 PM
Long: IMNM, META, MNMD0315C10, NFLX0315C615, VKTX0419C90
Short: MDB
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Ticker, Date, Call/Put, Strike Price
Example: VXX1218C30 = VXX 12/18 Call with a $30 strike