Don’t Trust This Bounce

February 14, 2024
Author: Peter Stolcers, Founder of OneOption

Traders will look at the drop and bounce from January 31st and try to scoop this dip. The context is different and a gap reversal is very likely.

PRE-OPEN MARKET COMMENTS WEDNESDAY – Yesterday the market pulled back from the all-time high as the CPI came in slightly “hotter” than expected (.3% vs .2% expected). The reason for the drop was not because inflation is spiking. The market has been pricing in a Q1 rate cut and the Powell said not to expect it until summer (at earliest). The slight up tick in CPI served as confirmation. After healthy gains the last 3 months, there was some profit taking. This morning the S&P 500 is trading 20 points higher and it is in the gap from yesterday. Overseas markets were higher overnight and that is providing a small tailwind.

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