Though inflation came in very hot, the bulls and bears stayed evenly matched, producing choppy uncertain price action while clinging to trends yet challenged by overhead resistance. So now we likely hurry up and wait for the FOMC decision on Wednesday afternoon to see if they will be the tiebreaker of this momentum-less consolidation.  Will they or won’t they begin to taper the easy money policies in response to inflation?  That is the question to be answered!

During the night, Asian markets saw bullishness though some were closed due to holidays.  European markets continue to push higher, setting new records this morning.  With a light day of earnings and economic data, the U.S. point to a flat yet slightly bullish open, with the Nasdaq leading the way to test resistance highs.  Watch for the pop the possibility of more pop and drops as we wait on the Fed.

Economic Calendar

Earnings Calendar

We have 12 companies listed on the earnings calendar with many unconfirmed earnings to kick off the week.  The only somewhat notable report I can come up with today is HEXO.

News & Technicals’

Bitcoin is surging again this morning after Musk suggests Tesla may again accept cryptocurrency as payment. However, Sygnia CEO Magda Wierzycka lambasted him saying, “What we have seen with Bitcoin is price manipulation by one very powerful and influential individual.”  Regulators may block Nvidia’s attempt to buy the chip designer Arm, whose energy-efficient chip architectures are used in 95% of the world’s smartphones.  According to reports, Qualcomm is now interested in investing if NVDA is blocked.  The biotech firm Novavas plans to file for authorization with the FDA in the third quarter after testing their Covid vaccine is safe and 90.4% effective overall.  With the FOMC just ahead, the U.S. treasury notes rose slightly this morning, with the 10-year coming in at 1.464% and the 30-year climbing to 21.52%. 

Though the bullish trends continue, the choppy uncertain price action and both the bulls and bears wondering what comes next.  Floating on a river of newly printed money, the bulls want to keep the party going.  However, the high inflation reading in last week’s CPI has the bears concerned, keeping them in play as well. So perhaps the FOMC will be the tiebreaker when they reveal their decision Wednesday afternoon.  Will they begin to taper easy money policies or keep the pedal to the metal, pumping money into the system?  We will know more Wednesday after the statement and the chairman’s press conference.  Until then, the choppy uncertain price action is likely to continue, with various meme stocks surging here and there as they gamify stock trading. So maybe the best description of the first part of this week is, hurry up and wait!

Trade Wisely,

Doug