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oh hello and welcome a very strong day in the market today led by technology uh NASDAQ was up 1.76 S P 500 up 0.93 Dao and Russell 2000 they were also up so you're looking at a heat map of s p 500 right here and the sectors you can see that uh you know the the the of the sectors the growth sectors are clearly pushing S P 500 higher um communication technology and uh discretionary these have been the the leaders so far this year but what we are seeing is that we're seeing Improvement in Industrials so this is important for not just for S P 500 this is the fourth highest heaviest weighted sector in S P 500 so you know Improvement in xli is going to put upward pressure in S P 500 but it also plays in role in Dao and Russell 2000 so Improvement in this sector definitely should help out Dao and Russell 2000 all the other sectors you can see kind of still underperforming uh at the moment I'm I'm watching the two biggest sectors the healthcare XLV and financial Excel F I want to see whether or not if there is any Improvement in these two sectors together these two sectors represent over 30 percent of s p 500 if these two sectors start to perform well that should put further upside pressure on sap S P 500 now obviously um you know S P 500 had a very strong day this is spy you can see spy has now taken out this high right here from August this was a big resistance Zone and there was a big decline after that it was kind of surprising that market rallies so sharply ahead of tomorrow's CPI report and Wednesday's fomc minute meeting so let's quickly have a look at what the market is expecting from a CPI point of view so in terms of CPI Market is expecting CPI for the month of May to come in at 4.1 percent which would be down from 4.9 percent from the previous month now if it came in at this number that would be a big drop from 4.9 to 4.1 percent now even if it comes in a little bit higher than this let's say 4.2 or 4.3 that would still be a big drop from 4.9 to 4.3 so if that's the case then I'm not sure if the market is going to react uh you know that much negatively you know 4.1 I mean I don't see how the market uh you know Falls a lot maybe maybe it can pull back a little bit but I don't see how it falls because the inflation is clearly moving lower if you look at the trend um you know a CPI Trend uh you can clearly see um so if you look at the trend you can clearly see that since reaching a 9.1 it's been moving lower and 4.1 would be a big drop um you know from the previous month uh and and this is for the month of May at this rate uh by the time the June CPI comes in uh the you know CPI could have a three handle and uh by the end of this year CPI could have a two handle so I don't see how this is negative for the market now uh if we look at the core the core is expected to come down a little bit from 5.5 percent to 5.3 so it's a modest Improvement you know not a significant one but uh if you look at it over the last few months the core basically remained kind of stuck you know 5.7 5.6 5.5 5.6 5.5 so if it comes in at 5.3 it would be basic really breaking this you know range to the downside you know you might say this is also a positive now on a month month over month basis the core is not expected to change so 0.4 is expected to remain unchanged but if I look at the CPI of 4.1 um you know to me that looks like a big drop and if CPI comes in at 4.1 I'm not sure the Federal Reserve increases interest rate on Wednesday you know they look at this number and say wait a minute because at 4.1 headline CPI would be over one percent below the FED funds rate which is at 5.25 so at 4.1 percent CPI I think there will be pressure on Federal Reserve to kind of pause uh you know and and if this trend continues towards the end of the year as I said CPI is likely to have it to handle so I'm not sure uh whether the FED Federal Reserve continues to increase interest rates so it'll be interesting to see what happens on Wednesday but I think there will be pressure on the Federal Reserve to pause and I think at 4.1 percent inflation I don't see how the market Falls in a big way yes you know we could have some profit taking but I don't see a 10 drop in the market uh you know I'd be surprised even if there is a seven or eight percent drop uh you know in S P 500 if CPI comes in at this at this level anyway that's CPI so let's come back to uh spy so here's the Spy so the next level to watch is this level right here uh which is around 436 because there was uh you know there was a you know it broke down uh below this level and then we see this big drop so this would be the next level I'm watching and after that it would be this level um so obviously 231 is in the books now in terms of support um I'm looking at the moving averages just to see where the prices are in relation to the moving average now obviously the price is beginning to move away from the moving averages you can see that 20 EMA's right here which is around 418.
um so you know you can see that the 20 EMA did Provide support uh you know uh during this time so at some point I would expect price to basically pull back towards the 20-day moving average so even even if it were to pull back to the 20-day uh moving average I don't think this is necessarily a bad thing I would I would say that you know this would be quite healthy because even if you look at the structure the the structure of higher lows will still remain intact and then if it does that and then does something like this I think this would be healthy I don't see anything anything wrong with this because what would scare me is you know a parabolic rice like this way what I would like to see is some kind of a pullback and then rally and in terms of the structure you know this series of higher lows remains intact so those would be the levels I'd be watching on spy and in terms of QQQ you can also see the QQQ um that's the next area I'm watching which is around 362 and then 371 would be this level it's entirely possible but again you can see that on a short term basis it started to move away from the the 20 EMA you can see that uh you know that it touched the 20 and 50 EMS previously so a pullback like this way and then something like this if that is that necessarily a bad thing I don't think so you can you know you can see that the series of uh daily uh higher lows will remain intact but momentum is very strong so I I'm also not saying that we should be shorting this Market because this is just a too strong Market but it is overbought sometimes it can remain overbought from an extended period of time but we've got CPI we've got fed you know fed meeting so there could be some volatility even if there's some pullback those would be some of the levels to look out for but I don't see based on the CPI I don't see uh you know a significant drop in the market so that's my uh view um in terms of individual stocks um so there's some stocks that I'm uh watching um so let's have a look at some of those stocks um first one is Airbnb so let me just get rid of some of these uh so you can see um Airbnb is in the discretionary sector so this sector is uh seeing some positive momentum uh you can see that it's gradually moving higher so this is the next area of resistance if it can take out this level then this would be the next Target so this level is around 120 128 so if this level gets taken out then I'll be looking uh for a move to this level but overall I like the structure it's been making a higher highs you can see the momentum indicators are moving higher so this is a stock I'm watching uh um another one I'm watching is vertex vrtx this is in the healthcare space although this sector is uh you know out of favor but I like the fact that it's forming this double bottom pattern it's now closed Above This previous high and you can see that RSI has moved back above the the 50 level so I'm watching this for further gain to the upside another one I'm watching is coolant sax I know that the financials are not in favor but within the financial sector this stock is beginning to look better you can see that it's Consolidated in this range for a while and then it has broken out of this range it has retested this breakout level and then it's moving higher so maybe it can uh you know that this would be the next level to Target as long as the market doesn't have a negative reaction to CPI so I would also be looking at Goldman Sachs another stock in the financial which is also looking interesting is Morgan Stanley so you can see that it traded inside this range and then it's also moved out of the range you can see that momentum indicators are improving another sector I like a lot is semiconductors and within that sector you know broadcom uh I mean obviously it had a big move and then uh consolidation and now it's breaking out of this bull flag consolidation you could say um I mean this is uh obviously it had a big move so it's quite risky but I think uh you know as long as the market moves higher I think this can rally more also in semiconductor conductor space another stock I like is teradyne so you can see that teradyne it's now taken out this level uh it also closed Above This level so this would be the next level to Target and if it's able to take out this level 111 then it's got some room to run so if you look at the um then you can see that uh um you know the next level might not be up to right here around 127.
so this is also a stock that's looking uh interesting to me um so leave it at that um we'll see what happens tomorrow I'll come back with another update and if I see any uh trading opportunities I'll come back with another video so please consider subscribing if you haven't done so uh sharing and liking thank you very much
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