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10/13/2023 |

Market Update Into October 16th: CPI Pumps The Brakes

This week, markets were squarely focused on two major events; The PPI and CPI numbers that arrived Wednesday and Thursday, respectively, and the start of earnings announcements from the beaten-down banking sector. PPI and CPI came in slightly hotter than expected, causing the markets to sell off, and they continued their decline into weeks end despite EPS and sales beats from three major banks. Let’s dig into the individual names and see how things are looking!

Weekly Analysis

This week, the SPY ETF closed at $431.50 (+0.46%), making it the strongest performer of the group. It got rejected just below the 20-week SMA, at the neckline of the long-term double bottom pattern but put in a higher high and higher low relative to last week’s candle. Of note, also, is the RSI reading, which is currently testing the important 50 level.

This is an image of the SPY weekly chart.

This week, the QQQ ETF closed at $365.28 (+0.16%), getting rejected at the 20-week SMA and just shy of the bottom of the long-term rising wedge. This index saw below-average volume but has the strongest RSI reading of the three.

This is an image of the QQQ weekly chart.

This week, the IWM ETF closed at $170.27 (-1.58%), putting in an ugly hanging man candle and looking quite precarious closing below the bottom of the long-term ascending channel for the first time since last year’s lows. Of note is the above-average volume and the hidden bullish RSI divergence.

This is a weekly chart of the IWM index.

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