- The NASDAQ 100 initially did try to rally during the trading session on Tuesday but has given up all those gains and now we're hanging around the unchanged level, all things being equal.
- I think there’s a possibility of a slight pullback, which would make sense in the current context.
- However, it’s important to note that CPI numbers are scheduled for release during the early hours of North American trading, at around 1:30 PM GMT on Wednesday, providing both month-over-month and year-over-year figures. That of course, will give us a heads up as to how consumer inflation is going in the United States.
The Fed Going Forward
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As things stand right now, the Federal Reserve is expected to cut interest rates by 25 basis points at the meeting in December. But then after that, the market is pricing in an 80% chance that in January they sit still. I think part of what you're seeing here is the market taking a breather before it gets important CPI and on Thursday PPI numbers that will let us know exactly how bad inflation is.
If we get a low reading, that's probably a good thing for the NASDAQ 100. If we get on target, I suspect we'll bounce. If we get really high, we'll see. That could cause a bit of a correction. Either way, as things stand right now, we still have the Santa Claus rally ahead of us, I suspect. So, any pullback all the way down to at least the 50 day EMA is going to struggle to pick up serious traction. And I think that the pullback and bounce type methodology of trading might be the way to go. Any opportunity to pick up cheap contracts are going to be looked at with favor. Shorting is impossible during this time of year.
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