All eyes on inflation data this week.
On Tuesday and Wednesday we will receive July PPI and CPI inflation data. This inflation reading will be extremely important because the Sahm’s rule has been activated and investors are concerned for a recession. Strong inflation data will help to ease those concerns so that the stock market can rally for a bit longer. Right now I would be cautious for some downside and sharp reversal to the upside.
Similar scenario for SPY, I think there could be some downside to retest the support level around $525 before experiencing a sharp reversal to the upside. For QQQ the key support level to monitor is around $433.
We’re starting to see some strong buy pressure for QQQ, and I have the red resistance line as a key level to monitor. I think the NASDAQ will continue to lead the way for any upward and downward price movements. If QQQ continues to trend up here I have $459 as a key resistance target. I still think we experience some type of drop over the next few days, which is something that we have observed in the previous bottoms. For now it seems like we could trend up higher first before a pullback. QQQ doesn’t have to reach the red trendline before dropping, it is just the first key resistance target to monitor.
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