Stocks to gain on better economic data – Is this an uptrend?

Paul Rejczak Gold Price Forecast

Stocks went closer to their recent local lows yesterday – is this still a potential bottoming pattern?

The S&P 500 index lost 1.16% on Thursday, as it got closer to the 3,800 level again. The broad stock market’s gauge continues to trade within an over two-week-long consolidation following mid-December sell-off from the 4,100 level. On previous week’s Thursday it reached new medium-term low of 3,764.49, before bouncing back above 3,800. Overall it kept extending a consolidation recently. In mid-December the S&P 500 has been negatively reacting to the December 14 FOMC interest rate hike, among other factors.

The S&P 500 will likely open 0.4% higher this morning following better-than-expected Nonfarm Payrolls release (+223,000 vs. the expected +200,000). Also, the Unemployment Rate fell to 3.5% and the Average Hourly Earnings gained just 0.3% m/m. The S&P 500 index trades within a consolidation along the 3,800 level, as we can see on the daily chart:

Futures contract remains above 3,800

Let’s take a look at the hourly chart of the S&P 500 futures contract. It went higher following the important monthly jobs data release. The resistance level is at around 3,900-3,920, and the support level remains at 3,800.

Conclusion

Stocks will likely open higher this morning. So it may see more sideways trading action. Investors will be waiting for the next week’s Fed Chief Powell’s speech on Tuesday, the Consumer Price Index release on Thursday and a coming quarterly corporate earnings season. There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.

Here’s the breakdown:

The S&P 500 index is expected to open higher this morning on monthly jobs data.
There have been no confirmed positive signals so far, however, stocks may be forming a bottom.
In my opinion, the short-term outlook is bullish.

Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!

Author

Paul Rejczak

Gold Price Forecast

Paul Rejczak is a stock market strategist who has been known for the quality of his technical and fundamental analysis since the late nineties.

GBP/USD clings to 1.3500 amid marginal losses

GBP/USD alternates gains with losses around the 1.3500 neighbourhood on Tuesday. Indeed, Cable struggles to further extend its incipient recovery in a context of continuous instability in the Middle East and modest gains in the Greenback.

EUR/USD alternates gains with losses near 1.1540

EUR/USD navigates a tight range near 1.1550 in the latter part of Tuesday’s NA session. The US Dollar’s vacillating price action accompanies the pair while market participants gear up for the crucial US inflation data due on Wednesday.

Gold loses the grip below $4,400

Gold retreats from its earlier tops and briefly revisited the $4,350 region per troy ounce on Tuesday. The yellow metal’s modest retracement follows lacklustre gains in the US Dollar and declining US Treasury yields across the curve, all amid steady uncertainty from the geopolitical landscape.

Shiba Inu Price Forecast: SHIB extends sell-off despite surging futures Open Interest

Shiba Inu (SHIB) maintains a bearish outlook on Tuesday, as it edges lower at $0.00000450. This marks the seventh day the meme coin has sustained a sell-off, weighed down by a weak technical structure. Shiba Inu derivatives continue to gain momentum, with perpetual futures Open Interest (OI) rising to 11.08 trillion SHIB on Tuesday, from 10.46 trillion the day before.

The inflation narrative is still way more important than the employment story

Core bonds sold off yesterday with the belly of the curve slightly underperforming in the US while European curves showed more of a bear flattening. Daily changes on the US curve varied between +4.7 bps (2-yr) and +6.4 bps (7-yr).

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.