Stock market thrust upward after lower-than-expected CPI data

CPI data come out at 7.1% vs. 7.3% analysts’ expectations which is a lot better. The situation put the market on bullish sentiment as it will take out reasons for the Fed to maintain its interest-rate hike plan. Tomorrow, traders will prepare for the FOMC meeting where the Fed is expected to raise the interest rates by 50 bps. If the Fed shows a dovish sign and starts to think less rate-hike for next year then we might see further upward pressure in the stock market. Despite the bullish situation, traders might want to wait until the final results and the market reactions before jumping into major positions.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index might resume the bullish movement today after lower-than-expected inflation numbers. Tomorrow, the Fed will announce interest-rate and provide an outlook on the future interest rate. Under the current situation, it seems the index could continue the upward movement unless the Fed decides to maintain a hard stance on its interest-rate hike. On the upside, the index needs to print a new higher high to confirm a bullish continuation. If the index starts moving lower again and closes below the daily SMA 200 then we might see a bearish continuation.

Best Buy Co Inc (BBY)

BBY share prices broke above the daily SMA 200 recently and start a bearish correction toward it. The share prices might bounce from the averages and resume the bullish movement. Traders could use the chance to enter long positions when the share prices test the daily SMA 200. However, if BBY breakout below the daily SMA 200 and close below it then we might see further weakness to test the lower averages.