Looming Catalysts Boost Market, More To Come
Coming into the week, there were some looming catalysts ahead for the market.
Because the market was waiting on the economic data releases, there was a lot of indecision to start the week. Both Monday and Tuesday were fairly non-directional excluding the pullback in the later half of the session Monday. This was a common price action into the looming economic data catalyst.
The catalyst looming all week finally made its mark on Wednesday morning before the opening. U.S. Consumer Price Index (CPI) numbers were released and came in better than expected. At the release of the data, the market reacted positively to the numbers, extending gains that were slowly building throughout the night. The rest of the session was fairly choppy in anticipation of the next wave of data.
Heading into the market open there was another positive economic data release that turned into a catalyst on Thursday morning. The U.S. Producer Price Index (PPI) data was released giving a further projection of inflation peaking.
This caused another positive reaction, rocketing the S&P 500 and Nasdaq to new highs on the week. Toward the middle of the session it had appeared bulls found exhaustion allowing bears to take over for the rest of day giving some nice downward momentum.
To end the week, after consolidating around the opening levels for the first hour of market open on Friday, the bulls returned and broke through the high of the day. After breaking the high of the day, the bulls had clear control of the market.
The bulls put on a steady pace to the upside and never looked back. For the next few hours the market had taken a steady approach constantly pushing new highs on the day with no real sign of bears taking over.
One trade that could be highlighted this week came from John Carter, Founder of Simpler Trading. This trade alert came in the live-trading online chat room where he sold an iron condor on Tesla (TSLA) for 2.00 credit and bought it back for .50, yielding 75% of max profit.
As we look at what is to come next week, there is once again no shortage of market catalysts. Next week there is options expiration, or OpEx, which comes the third week of every month and Federal Open Market Committee (FOMC) where Chairman Jerome Powell always has the opportunity to shake up the market in a big way.