After the Trump-Kim summit, conditions were perfect yesterday for movement to the tune of “selling the news.” But the moment, though, that it became clear that negative pressure wasn’t building up, buyers opted to focus on tech stocks (XLK), pushing the NASDAQ 100 (QQQ) to a new intraday high, the index boasting nice gains at the closing.
Biotech (IBB), energy (XLE) and tech (XLK) stocks recorded nice gains yesterday, while financial stocks (XLF) and the large indexes – the S&P 500 (SPY) and the Dow Jones (DIA) – when push came to shove, did very little. Even though the big indexes traded sideways, the atmosphere among traders was upbeat, with almost 450 stocks succeeding in recording new 52-week highs. Day trading live saw heaps of new stock highs.
The bears again proved that they can’t stably maintain negative price movement. It was easy to push a negative narrative when considering that the indexes are slightly tense on the upside, but that’s simply not what happened!
The bears will have another opportunity today to react by “selling the news,” the Fed set to make its interest rate announcement today, the policy announcement coming out at 14:00 N.Y. time. Thereafter, the Fed will hold a press party. Yesterday, we did get a negative release in the form of inflation figures which were released before the opening bell and which pointed to an annualized rate of 2.8%. In other words, that was the highest clip of inflation since 2012. Even though the market did little more than shrug, the inflation reading could command more attention today leading up to the interest rate announcement. That will be one of the main focuses today in stock market day trading courses.
Statistically, Fed days are positive for the stock market, bears having little in the way of success on days like this. Even when as far as the news goes, the writing’s on the wall, it would seem that algorithms are preprogrammed to buy in. When considering the growing signs of an uptick in inflation, along with the fact that the unemployment rate is at a historic low, it wouldn’t be surprising to hear hints as to a more aggressive rate hike clip on the part of the Federal Reserve Open Market Committee. At the same time, the market hasn’t shown any signs of fear just yet. That could change though at any moment in stock trading chat rooms. Live trading could get wild today!
Wednesday: The central bank is expected to announce a rate hike in its policy announcement at 14:00 N.Y. time. It wouldn’t be surprising if the stock market was relatively quiet in the first trading hours, the big dose of volatility coming in the last 2 trading hours. Shortly before the opening bell, investors will have another opportunity to get an insight into inflation with the Producer Price Index (PPI) coming out at 8:30 N.Y. time. The index is expected to record a May rise of 0.3%.
As is the case every week, crude inventory figures will be released at 10:30. They are expected to affect the price level of energy stocks.
Have a great trading day!
Today’s Picks – Day Trading!