To The Moon

Summary of the week

On Friday, the S&P500 added 0.9%, to close at 3,992.93, taking its gain for the week to 5.9%, its best week since the one that ended June 24 this year. $S&P 500(.SPX)$ 

The Nasdaq Composite added about 1.9% to end at 11,323.33. $NASDAQ(.IXIC)$ 

The Dow Jones Industrial Average gained 0.1%, closing at 33,747.86.$DJIA(.DJI)$ 

 The Nasdaq Composite climbed 7.4% on Thursday, its best day since March 24, 2020, when the pandemic began. The S&P 500 jumped 5.5%, while the Dow Jones Industrial Average gained 1,201 points, or 3.7%. $Amazon.com(AMZN)$ $Microsoft(MSFT)$ $Apple(AAPL)$ 

The continued moderation of inflation has caused 10-year bond yields in the United States to plunge.

The wild trade trigger for this 'hallucinate rise' was a better than expected consumer price index, which showed prices were up 7.7% from a year ago, down from the September rate of 8.2% and below expectations for an 8% increase. Prices rose 0.3% from the previous month, excluding volatile food and energy prices, below a forecast gain of 0.5%.

Market's scenario

The startling data would have raised hopes that inflation had finally peaked...

The rise in equities would give hope that this was not a one-time gain or simply a short covering...

A logical market response to the Federal Reserve if it decides to make a smaller increase at its next meeting and lower its peak rate...

But that's only one month of data, and it's probably too early to say that this would be the end of the decline in equities or the signal of a soft landing for the economy...

More, it certainly wouldn't indicate the proverbial “pivot” the market so desperately needs...

The latest CPI report wouldn't change our minds that the FOMC could raise the fed funds rate to between 5% and 6% and that a demand-driven recession will hit next year...

Calendar:

Next week, there will be producer prices and the Empire State index (Tuesday) and then retail sales on Wednesday. A G20 is scheduled for November 15-16.

SPX levels: (For information only, no buying and selling advice)

• Now the market should enter a consolitaion building gamma with Exp 18 Nov.

Levels for the start of the week

• 4000 and 3910 are the key levels.
• Upper area: 4050-4100
• Lower zone: 3800 - 3700

Thanks for reading.

@TigerStars @CaptainTiger 

@Do_Trading Twitter