CPI Is Hot And So Are These Sectors
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ETF Trade Watch
CPI dropped this morning, and it appears that inflation rose slightly in January, 0.5%, leaving inflation 6.4% higher than a year ago. The market is sure to react to this news, so it is a very good day to practice patience, not chasing trades, and looking for A+ setups only. Let’s look at some sectors who led the way yesterday, and see if there is anything left in the tank for today.
Technology Select Sector SPDR ETF (XLK)
The market had a well-defined trend day yesterday as prices marched higher. This means that Tech was off to the races, leading the charge for the market to climb higher.
Names like Apple (AAPL), Microsoft (MSFT), and Nvidia (NVDA) all had green days making for a strong performance by this sector ETF. Although these stocks performed well to start the week, Tuesday morning’s CPI announcement may very well send the market into a volatile frenzy after the opening bell. Again, this is a time to stress patience and looking for only the best setups.
Vanguard Consumer Discretionary ETF (VCR)
Consumer discretionary is also on watch today as the sector’s performance yesterday left it as the second highest rising sector.
With names like Amazon (AMZN), Tesla (TSLA), and Home Depot (HD) this sector tracks goods and services that the consumer doesn’t necessarily need, but will purchase with discretionary income, shocking I know. Since the consumer’s buying activity has remained strong, this sector remains on my watchlist for the week.
Much will rely on the CPI report breaking and how the market will react to it. Either direction the inflation number sends the market, watch this sector for some strong, trended movement.
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