S&P 500: Bulls or Bears, Which Side Is in Control?
2023.01.13 03:27
Thursday’s trading session took the on a wild ride, but you wouldn’t know if all you saw was the day’s modest 0.3% gain.
The extreme kicked off after the monthly showed inflation falling for the sixth month in a row.
While no one is excited by 6.5% , it sure beats the 9% recorded back in June. And even more impressive, some categories actually saw price declines from November.
While it is premature to claim the inflation beast has been slain, there is enough history to say conclusively, inflation is not spiraling out of control. It won’t get resolved nearly as quickly as some hope, but we are headed in the right direction.
The most impressive thing about Thursday’s wild swings was their balance. Every bit of down was matched by a bit of up, and almost every bit of up was matched by an equally sized bit of down.
To the point where within minutes of the close, the index was tracking near breakeven before a minor lift gave us that modest 0.3% gain.
Stocks couldn’t sustain a move on the CPI data because it didn’t change anyone’s mind. Bears were just as bearish as bulls were bullish. Prices don’t move when people don’t change their minds and this morning’s just-right result split the difference.
While it would be easy to call this a tie, in this instance, the tie-breaker goes to the prior trend, which is up. In addition, as easily as stocks fall, holding steady is another win for bulls.
It doesn’t look like a lot happened Tuesday, but until something changes, the bulls are still in control of this market.
The next big hurdle is the 200 DMA and 4k resistance. These technical levels proved too much for the market to overcome back in November and December.
Will this time be any different? Only time will tell, but until prices actually start falling, we have to keep giving the benefit of the doubt to the rebound.
