Market Grinds Higher into PCE Numbers


Simpler Trading Team

Jan 26th 2023  .  3 min read

Market Grinds Higher into PCE Numbers

The market rebound from yesterday’s early sell-off, driven by Microsoft’s guidance and the spread of employment layoffs, continued to climb overnight and into the pre-market session today. The indexes are now on an upward trajectory with positive momentum ahead of today’s trading session.

Jobless Claims Continue To Show Positive Signs

As the market opened, investors were greeted with positive news as the weekly Initial and Continuing Jobless claim were released. To everyone’s surprise, the data revealed that Initial Jobless Claims had fallen below 200,000 for the second week in a row, and even improved from the previous week’s 192,000. This exceeded the median forecast of 205,000 and provided a boost to the market. The labor market has been showing signs of strength in recent weeks and investors took notice, sending the market higher.

Tesla Motor Company (TSLA) earnings were another positive report that has helped the market remain at these highs. The initial reaction to the earnings report may not have raised the market exponentially, but it gave no reason for it to fall. Tesla saw a gap up of 10% in the stock price as they announced a beat in both Earnings-Per-Share (EPS) and revenue.  

Another Slow Start With A Strong Recovery

As the trading session progressed, the market continued to push higher, with the S&P 500 futures breaking through the 4,050 level and climbing towards new highs. This resilience in the face of profit-taking at the open is a positive sign for the market’s overall health and could indicate that the upward trend will continue in the coming days.

Despite the market reaching new highs, traders are keeping a close eye on any signs of exhaustion. After a steady climb, the market took a break and consolidated around the Volume Weighted Average Price (VWAP) during lunch hours. As the day came to a close, the market saw a final push to create a new high for the week, but the market’s ability to sustain these highs will be closely watched in the coming days.

Where The Market May Be Headed Next

There are some levels to keep on your chart as this week concludes. For psychological levels, 4,100 and 4,050 are critical to watch. 4,100 becomes a target for the market above if the line in the sand of 4,050 continues to hold. If 4,050 does not hold, a reversion toward the 21-day exponential moving average (EMA) at 3,970 could occur. The first target on the downside would be that 4,000 level.

Another Comeback To Close Green

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 futures closed up 1.03%, gaining 41 points, while the Nasdaq futures closed up 1.84%, adding 215 points. The Dow Jones futures followed, closing up 0.57%, an increase of 187 points.