The stock market pushed higher last week, albeit at a slower pace compared to the previous week. It's impressive that the market rallied at all given how much the market has advanced since the recent lows of October 27th. There is now a lower chance of a W-shaped market bottom with last week’s continuation of the rally and a breakthrough of resistance between 4393 – 4403 on the S&P 500. It is likely that the lows of October 27th were indeed the true lows of the correction that began on July 27th, exactly 3 months.
This week could add fuel to the uptrend with two important inflation reports and the final slew of 3rd quarter corporate earnings. At the time I am writing this, the first inflation report has been released and inflation was below expectations with the stock market responding to the upside. The previous three inflation reports were hotter than expected and in part may have been the catalyst for the recent correction. A new leg lower for inflation would be a big positive for the Federal Reserve and investors.
Photograph by: Mike Hindle on Unsplash
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