May reveal for February should go up much more.
This week will be a short trading week due to the holiday, but it will still be full of data that influences market movements, in light of the Fed’s meeting minutes scheduled for release on Wednesday, and on Friday, we will have data, along with the . The minutes are likely to provide some clues as to what the Fed is looking for when pausing the rate hike cycle. I also believe that the market will be looking for a clear trend in the monthly inflation readings that suggest the Fed is running the economy at 2% rates.
Also, the index is expected to rise 0.5% on a monthly basis, up from 0.1% in December and 5% on a yearly basis, unchanged from December. If this monthly value comes out as expected, it would indicate that the 3-month annualized trend for personal consumption expenditures rose to 3.35% (November, December, January) from 0.9% annually (October, December, January). Meanwhile, the index is at 3.3% annually from July to January, up from 2.1% annually during the same period.
Therefore, we can note that the 3-month and 6-month year-on-year changes are sharply lower than they were, yet they are still well above the Fed’s target for core personal consumption expenditures of 2% and showing a significant acceleration from the previous trend. . While a single data point won’t worry the Fed, a hot February reading could. Therefore, if the January data comes in as expected, it probably means that the Fed will take a step back in achieving its target.
Both the index and this past week certainly gave investors pause and even prompted analysts to increase estimates for personal consumption expenditures. As a result, Fed Fund futures have been repriced and are now more than 80 basis points higher than they were on February 2, the day before. The final rate has now peaked at 5.3% in August, up from around 4.85%.
10-year bonds
This led to higher nominal rates, with a move towards resistance and testing that resistance at 3.9%. It also appears to have broken from a bullish pennant pattern, and the RSI has broken above two downtrends. This likely indicates that the overall momentum in 10-year notes has shifted to higher rates.
In addition, in the event that the 10-year note rises above 3.9%, a double bottom is likely to be confirmed and likely to trigger a retest of the highs around 4.25%.
Exchange Traded Fund Tlt
We can see a similar development in the TLT exchange-traded fund, which has fallen below a major upward trend and away from its October lows. Momentum in TLT has also shifted from an upward momentum to a bearish momentum, with the RSI breaking below an uptrend and forming a new downtrend in the RSI. At this point, support comes in at around $99.70, and if this price point breaks, it creates a double top pattern and stock bottoming potential.
The American
It also broke out, rising from the falling wedge. I think that the dollar can return to the 105.80 area.
S&P index
Most importantly, the indicator seems to complement the reversion and run pattern. The first uptrend of the bounce and run pattern has also completed, and now the S&P500 is likely to continue drifting towards the lower trendline, around 3950.
QQQ Fund
At this point, the question becomes whether or not the QQQ fund has completed an extended trend, and if it completes wave ‘E’, the next stop for QQQ will be around $270.
QQQ vs TIP
Moreover, there was a major breakup between KQQ and the TIB ETF. The TIB ETF represents the real rates, and when it goes down, it indicates that the actual rates are going up. Rising real prices are bad for stocks and the NASDAQ in particular. Given the widening gap between QQQ and TIP at the moment, we conclude that QQQ is overestimated in terms of real returns.
nvidia
Nvidia (NASDAQ: ) will be reporting results this week, and I can confirm that Nvidia is not going to publish results worth the stock’s 51% rally since the start of the year. The stock stopped rising around the 1% extension of the A-wave retracement and is now very close to breaking the support at $209. The next level of support will come in at $200.
Camel
You should keep an eye on Apple (NASDAQ: AAPL). I have held this stock for a really long time, but it has seen a scary move off the bottoms. The stock stopped at $156 despite a few attempts to break out. The stock also overlooks the 10-day exponential moving average. And if it breaks below this moving average, it would indicate a change in trend and it is likely to close the gap at $145.
I wish you good luck this week.
