Now that the 3 Key Economic Reports are Out, What Now for the Stock Market?

Tom Gentile

Posted in
Technical Analysis

By: Tom Gentile
April 13th, 2023

3 mins read

Today was a good day for equity bulls overall.

The Dow ended up higher on the day by +1.14%, the NASDAQ up almost +2% and the SP500 ended up +1.33%.

Nothing from the numbers caused a sell-off for the equities markets, but at the same time, even though the markets traded a bit higher so far this week, neither of the three major indices (Dow, NASDAQ and SP500) have broken out in a bullish fashion.

CPI, PPI, and Initial Jobless Claims

CPI Wednesday: Came in showing prices rose moderately at 0.05% vs expectations of 0.03%. March CPI increased 5%. That was versus the forecast for a gain of 5.2%. That marked the slowest pace of annual inflation since May 2021.

PPI today: The reported PPI came in at a 2.7% annual for March. 

Last year overall inflation was up as high as 9.1% (last June). This latest report shows it coming in now half of what it was back then at 5%, (for the year ending in March).

Initial Jobless Claims: For the week ending April 8, 2023, jobless claims in the U.S. for the week ending April 8 showed an increase of 11,000 to 239,000 (from the previous week).

This is the most since January of 2022 when 251,000 people filed for unemployment benefits.

President Biden Extremely Happy with the Results

In our research we are reading that President Biden is happy and taking credit for inflation being at 5%, saying it is a strong sign for the economy.  He is trying to, along with the Fed, execute a soft landing; for him it seems he would feel it is coming out of policies established during the COVID-19 pandemic.

The following is an excerpt from an article in the Washington Examiner: “Today’s report shows continued progress in our fight against inflation with the 12-month inflation rate at the lowest level since May 2021,” Biden said in a prepared statement. “This progress follows last week’s news that our job market remains historically strong.”

The Big Three Stock market Indices

Though the big three indices showed strong gains today, none of them have broken out to fresh highs.

The charts of each over that past 120-trading days shows a bullish reversal day for each of them.  There may be some more upside due to each of them, but what needs to be monitored is what they do when they hit resistance or their previous highs.  You know where to find the Morning Reports for help finding option ideas for your bullish or bearish stance.

Let’s look at charts of the ETF’s for the Dow, NASDAQ and SP500

Figure 1: 120-day Candle Chart DIA
Figure 1: 120-day Candle Chart DIA
Figure 2: 120-day Candle Chart QQQ
Figure 2: 120-day Candle Chart QQQ
Figure 3: 120-day Candle Chart SPY
Figure 3: 120-day Candle Chart SPY

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