U.S PPI data come out hotter than expected, stock market start a pullback

The stock market tone looks bearish today following the release of U.S PPI data which came out higher than expected. The data show a 0.5% increase while consensus saw a 0.2% increase. It seems the Fed’s battle against inflation will continue without a rate-cut. No rate-cut will happen in the second quarter and higher-than-expected inflation numbers might delay the rate-cut further.

Nevertheless, if the stock market starts a bearish pullback, traders will use the chance to enter more long positions at a lower level. As long as there is no change to the market structure, traders will continue maintain bullish outlook this year.

Technical Analysis

Dow Jones Industrial Average (INDU)

DJIA index continues the bullish movement and soon will reach a new higher swing high. The index bullish trend has not broken and traders will continue hold long positions in stocks. If the index start a bearish correction then traders will wait near support levels for chances to enter long positions at a lower level. As long as there is no lower high and new lower low then the bullish trend will continue.

Monster Beverage Corporation (MNST)

MNST has broken below the major $55.00 support line and currently retesting the broken support level. The share prices might experience bearish rejection from the broken support line and resume the bearish movement. However, if the share prices manage to break higher with strong bullish pressure, the trend might turn bullish again. Currently, traders could enter short positions assuming the bearish scenario will play out.