CPI Data Ignites Market Rally: What It Means & Top Trades for Tomorrow
Today was a day of days in the stock market. The CPI data came in slightly better than expected, sparking a rally that reversed recent bearish trends. Let’s break down what happened, why it matters, and how to position yourself for tomorrow’s trading session.
Market Recap
The market gapped up after CPI data showed inflation remains high but was slightly below expectations. This fueled a bullish sentiment, breaking the cycle of fading gaps we’ve seen in recent sessions.
- Key Takeaways:
- $QQQ reclaimed its 50-day moving average with a 2.3% gain.
- Speculative stocks like $TSLA (+8%), $MU (+6%), and $NVDA (+4%) saw strong moves.
- Breakouts held, and dips were bought, signaling a shift in price action.
Why This Matters
Today’s rally marks an important psychological and technical shift:
- Psychological Shift: Gaps that fade signal weak demand, but today’s strength showed buyers stepping in.
- Technical Significance: The reclaim of the 50-day moving average is a key level for bulls and swing traders.
Top Trades for Tomorrow
Day Trades to Watch:
- $LUNR: Breakout pullback setup at the 9 EMA. Look for a weak open and dip-buy opportunity.
- $rddt: Multi-month base breakout setup. Watch for a move over $180.
- $TSM: Earnings catalyst on deck. If it clears consolidation, semiconductors could rally.
Swing Trade Setups:
- $VRT: Testing support with tight price action and volume accumulation. Watch for a move higher.
- $SMTC: Earnings-driven push with a consolidating range. A breakout above $70 could trigger a run.
- $TWLO: Multiple tests at resistance. A breakout over the 9 EMA could signal a strong move.
Key Trading Tips
- Flexibility is Key: Market sentiment can shift quickly—adapt and stay nimble.
- Don’t Chase: Focus on constructive setups and avoid FOMO.
- Watch the Open: Weak opens in a strong market can provide the best opportunities.
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