Traders Prepare For Wild Week Of Stock Market Catalysts


Simpler Trading Team

Sep 12th 2022  .  3 min read

Traders Prepare For Wild Week Of Stock Market Catalysts

Both the S&P 500 and Nasdaq futures found a nice gap to the upside over the weekend with plenty of levels on both sides to target this week. But first, let’s look at the critical stock market catalysts ahead and how they may shape this week.

Kicking the week off is the U.S. Consumer Price Index (CPI) on Tuesday, followed by the U.S. Producer Price Index (PPI) on Wednesday, and the retail sales report on Thursday. These three economic reports are outside influences that could cause stock market moves. 

This week is also S&P 500 (SPX) rebalancing, options triple witching, and PHLX Semiconductor Sector Index ($SOX) rebalancing. 

These market events make the week extremely volatile and traders should prepare to adapt trading plans if needed.

Psychological level draws line in the sand

Coming into the Monday open session, the psychological level of 4,100 was a good line in the sand to gauge bullish or bearish market sentiment.

This level will continue to be the target for traders as volatility plays out this week. The market started trending in a bullish way as the opening drive began today. Once the level was defended, the momentum started to pick up.

The rest of the day faced heavy volatility in a familiar fashion seen in other weeks with this many releases of economic reports. These shared characteristics include volatility, indecision, and aggressive spurts of price action. 

A defining moment from today came when the 4,100 level was defended again after a midday pullback. Ultimately, the market had the strength to hold and recover the losses by returning toward the high of the day.

Are you prepared for looming catalysts?

As the market sets up for its next move, traders should prepare and have a price target for both sides, especially with significant stock market catalysts looming. 

As far as targets in the market, traders at Simpler Trading are watching the S&P 500 (/ES):

If /ES breaks $4,101, the next target is the next zone at $4,153. With /ES gapping into Monday’s session, it could fill the gap to the downside toward $4,074. If /ES fills the gap at $4,074 and doesn’t hold $4,059, the first target is $4,042, or the 50-day simple moving average (SMA). The second target is at $4,013.

As a trader, these targets are essential to include in the game plan because anything can happen this week. 

Market closes strong for consecutive days

For a large part of the day price action contained very choppy action as the indecision of the next market move awaits a major catalyst this week, namely the CPI release tomorrow morning.

In the last hour of the session, there was a push to the upside as the market decided to pick up from where it had left off last week with higher gains.

At the close, both the Nasdaq and the S&P 500 futures ended positive on the session. The S&P 500 futures closed up 1.15%, gaining 47 points, while the Nasdaq futures closed up 1.40%, increasing 179 points.

Today marks the fourth consecutive green day for the market dating back to last week.