Will CPI Set Up Our Latest Trade For Success Or Put It On Clearance?
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– ETF Watchlist –
The theme of this week and what could either send the market higher or lower is inflation. CPI and PPI are set to drop and if the trend continues, the rate at which price are increasing may continue to slow. If this is the case, then we could see another leg up in the market. So what are some areas we are watching in the Smart Trades community? Let’s talk about one today.
SPDR S&P Retail ETF (XRT)
In a past article, we highlighted the retail sector as one that was having buying pressure build. If inflation comes in at a slower rate than previous months, this could act as a positive catalyst for the sector. When looking at which sector ETFs we want to keep an eye on, we again turn to the XRT.
After XRT’s break and hold above 64, the stage may be set for CPI to come in and act as a major catalyst one way or another. The trend certainly bodes well for the bulls, but as this market has shown us time and time again, anything can happen.
Be sure not to miss the latest CPI reading to gauge whether this ETF will be off to the races or not. As CPI is released before the market is open, if it does come in bullish, look for a pullback if this sends prices higher in order to get a better entry, rather than chase the move.
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