U.S. CPI comes in at 3.4% December 2023, as opposed to November at 3.1%. Costs rose across the board sans a slight drop in energy. The NASDAQ dropped then popped on the news, forming a possible bull trap near or at 17000.

 

As noted in this post, the market have been grossly over optimistic and overly confident that inflation has abated in the U.S. in fact in came in at 3.4%, as opposed to November reading that was at 3.1%, with December 2023 core and headline inflation rising across the board, with a slight drop in energy costs.  Which is pointing to sticky inflation spill over from 2023.  The NASDAQ, as a measure of speculation in lieu of the Federal Reserve maintaining interest rates at the current 5.6%, without the futures market assuming that there will be a rate cut in March 2024.  Which for the most part is a misaligned assumption via the Bond Markets.  Yet, on the news that U.S. CPI coming in stronger than the markets estimation of 3.2% for December 2023.  And with geopolitical tensions in the Middle East rising, with the U.S. and U.K. attempting at reducing Iran's military power in the region, by using Western military power.  The CPI is likely to start heading upward again, one cannot rule out a possible rate increase, rather than cut in 2024.  In the meantime.

The NASDAQ dropped to 16656 on news of the inflation rising, then popped above its price support of 16684, bid at 16820 via futures.  Although a bull trap could be forming at record high of 17000.  Please refer to the chart above.