Small caps could be on the brink of explosion today…
Crucial data is being released at this very moment that could shake up the market.
And we want to be ready to capitalize…
So today I’m sharing why this news is so important for money movements in the market.
And how small caps could benefit the most from this news…
Keep up with everything happening in the market with our LIVE training sessions — sign up now to see the opportunities we’re watching!
Will Small Caps Explode Today?
The entire market will have its eyes on fresh Consumer Price Index numbers due to come out this morning…
And they could have big implications on the overall market and small caps.
Even though small-caps stocks don’t always follow the overall markets, these macro headlines can impact the money flow in the market.
Macro news impacts how traders approach risk.
Whether it’s the big money hedge funds or retailer traders…
When the market is frothy — risk is on, baby!
When the market is full of doom and gloom, traders flock to safer trades.
So here’s what I’m looking for in the CPI number today and how you can adapt your strategy based on price action following the news…
How to Trade After CPI Numbers
The market is always looking ahead…
And right now, it’s looking forward to the Fed cutting interest rates. That’s why it’s been climbing for months…
The market is pricing in the Fed lowering interest rates based on signs that inflation is cooling.
SPY chart: 1-year, daily candle — courtesy of StocksToTrade.com
Lower interest rates are considered good because they make it cheaper for businesses and individuals to borrow money.
That means they can grow their business or invest…
The market looks at it as good for economic growth.
Here’s how small caps fit into the headlines…
Most small-cap companies are in the developmental stage … They’re developing new drugs, treatments, or tech products.
And since they’re such small companies, they depend on a lot of debt to grow their business and products. Most of these companies lose money every year.
That’s why lower interest rates could be a positive catalyst for small caps.
It means they can get their hands on more money to develop products and pump out press releases.
And if the CPI numbers show that inflation is cooling, it could be a sign that the Fed will cut interest rates this year — maybe even this quarter.
If that happens, we could see a frothy market with an appetite for more risk. That could mean more traders will have their attention on small caps.
See the seven stocks I’m watching this month here.
I’ve been saying the market would go higher since the Trader and Investor Summit in October — and I basically timed the bottom of the SPDR S&P 500 ETF Trust (SPY). (Keep your eyes out for future news of our spring trading conference happening in April!)
Traders should be ready to follow the opportunities this huge catalyst can present.
If you want to learn how the StocksToTrade team is approaching the news and market this year — attend our next free training session.
It’s happening soon so sign up now to get reminded when we go live!
Have a great day everyone. See you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade