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This past week saw some wild action in the markets. Both the Nasdaq and the S&P 500 hit new all-times on Wednesday and then fell back sharply on Thursday. The AI stocks were absolutely whacked on Thursday but then recovered some on Friday. The CPI report on Thursday came in cool, but on Friday, the PPI report came in a little hot. Thursday’s CPI report kicked off a massive rally in Real Estate, Small-Cap and Interest Rate sensitive stocks like the homebuilders. It also caused an almost 400-point spill in the Nasdaq on Thursday. The thrashing seemed to be caused by some sector rotation into small cap and interest rate sensitive stocks. I do not see a major change in the current trend of the market yet, however. One day does not typically start a new trend. Additionally, Friday saw an important bit of price action towards the end of the day often called a “Friday Slide” as seen below. This is often profit taking after large moves and is important to understand how it relates to Wyckoff’s cycle specifically confirming or marking distribution patterns. This is not something broadly understood so I’ll just give my 2 cents on it. We see this a few times a year when a large news event that negatively affects the market is bought up the following day – specifically on Fridays because this is when we see profit taking to avoid headline risk on the weekend. It also matters where the market is currently sitting at (hence the Wyckoff Cycle relation). We have been at all-time highs and it was only on Thursday where the market cooled off following the data. Final note is that action is often undecided and choppy following a Friday Slide for at least a day or two. submitted by /u/Market_Mages to r/Market_Mages |