Bulls Stay Strong Despite Inflation Data

The stock market was choppy on Wednesday after opening higher despite another disappointing report on inflation. The consumer price index rose to a 7% year-over-year rate for December, marking the fastest increase in 40 years.

The number matched forecasts and was less than feared but nervousness prevailed following reports the supply chain crisis could last well into 2022. The major indexes still managed a mostly higher close with the small-caps slacking.

The S&P 500 ended at 4,726 (+0.3%) with the intraday peak reaching 4,748. Current and lower resistance at 4,725-4,750 was reclaimed. A move above the latter would be an ongoing bullish development for a retest towards 4,775-4,800 with the January 4th all-time high at 4,818.

The Nasdaq closed at 15,188 (+0.2%) with the morning high hitting 15,319. Prior and lower resistance at 15,250-15,400 was cleared but held. A pop above the latter would indicate ongoing strength towards 15,500-15,650.

The Dow tested an opening high of 36,453 while settling at 36,290 (+0.1%). Key resistance at 36,500 was challenged but held. A close above this level would indicate additional strength towards 36,750-37,000 with the lifetime high at 36,952.

The Russell 2000 finished at 2,176 (-0.8%) with the first half low hitting 2,169. Fresh and upper support at 2,175-2,150 was breached but held. A drop below the latter would be a renewed bearish development with back-test potential towards 2,125-2,100 and the December 20th low at 2,107.

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ANALYST UPGRADES/DOWNGRADES

iRhythm Technologies (IRTC) upgraded to overweight from neutral at BTIG
Shopify (SHOP) upgraded to buy from hold at William Blair

Fiserv (FISR) downgraded to hold from buy at Jefferies
PayPal (PYPL) downgraded to hold from buy at Jefferies
Ryanair Holdings (RYAAY) downgraded to hold from buy at Wolfe Research

THURSDAY'S EARNINGS ANNOUNCEMENTS 
Before the open: Biomerica (BMRA), Delta Air Lines (DAL), Opsens (OPSSF), Taiwan Semiconductor (TSM)
After the close: Washington Federal (WAFD)

THURSDAY'S ECONOMIC NEWS
Initial Jobless Claims - 8:30am
Producer Price Index - 8:30am

METALS/ OIL
Gold closed at $1,827.30 an ounce, up $8.80
Silver settled at $23.21 an ounce, up $0.40
Copper finished at $4.58 a pound, up $0.15
Crude Oil was at $82.79 a barrel, up $1.34
Bitcoin Investment Trust (GBTC) ended at $31.95up $0.80

I hope this helps you prepare for the trading day. Make it a great one!

 Todd Mitchell

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