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Will This Week’s Inflation Data Crush the Rally?

by | Sep 12, 2022 | Market Outlook

In this week’s Wall Street look ahead, we are once again at a major crossroads… Will the furious buying we saw Friday continue in the face of what could be a daunting week of data and news? I’ll break down some technical signals to watch on key charts, and look at the most important economic catalysts this week.

First, let’s look at this week’s key economic release…

Wall Street Look Ahead: The Economic Numbers That Matter

Consumer Price Index (CPI), Tuesday, Sept. 13, 8:30 a.m. EDT:  -0.1% month over month, 8% year over year (6.1% excluding food and energy).

We’re back to viewing a strong CPI as a major negative because Federal Reserve Chair Jerome Powell has shown full commitment to stomping out inflation by any means necessary. We’ve more or less already priced in the coming interest rate hike, which is likely to be another 0.75% increase this month, but a massive month-over-month reading in core CPI (excluding food and energy) could see rates shoot higher, which would be bearish for growth stocks.

We DO NOT want to see a positive number in the MOM reading…

Key Macro Charts

After an extended sell-off in the Nasdaq not seen since 2016, we managed to recoup toward the end of last week, rallying nearly 6% from Monday’s Sept. 6 low.

A stock chart (Wall Street Look Ahead)

We’re right at resistance at the Nasdaq’s 50-day moving average. If we rally early this week, I expect heavy volume selling at 13,000 on the index. So in the short term, I believe we’ve already realized the lion’s share of the upside.

Oil made a bottom last week at the same time the U.S. dollar topped out…. A weaker dollar should boost commodities prices this week. You can see the dollar index dipped (blue line) as oil bounced off near-term lows on the chart below. I expect the dollar to continue to sell off this week, and oil to rip higher.

A stock chart (Wall Street Look Ahead)

Remember to visit Joy of the Trade on Friday for a recap of my Wall Street look ahead to see how it all played out!

Jeff Zananiri
Joy of the Trade, WealthPress

P.S. Class Starting: The Biggest Overnight Moves I’ve Ever Seen

I’ve opened up the event room to reveal to traders for the first time, “Endgame 2022.” 

I’m sure you already know because I’ve been talking about it all weekend, but let me remind you…

You see, as most traders watch volatility slowly decrease and the markets continue to sink… 

They’ve missed the fact that Wall Street is quietly buying up volatility… 

And this last week’s volume? $4.1 Billion! 

Which means one thing… 

We could see MAJOR overnight opportunities for the remainder of 2022!

Join me live  1 p.m. EDT on Monday, Sept. 12, to start tapping into some of the biggest overnight moves I’ve ever seen! 

See You In a Few Hours!

WRITTEN BY<br>Jeff Zananiri

Jeff Zananiri

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