Hey everyone! Big news that could move the markets this week:
The Federal Reserve is injecting $55.3 billion into the market over the next 3 weeks starting Tuesday.
Wait, why does the Fed add or remove money from the market?
∙ When they add money (like now): It’s meant to support the economy and keep markets stable
∙ When they remove money (what they’ve been doing): It’s to fight inflation and cool things down
∙ This is the opposite of what they’ve been doing lately, which makes it notable
How this could affect your trades:
∙ This injection could push the market up in the short term
∙ We might see more green days after the slight pullback we had last week
∙ Expect potential volatility as the market reacts to this news
∙ Markets typically respond positively to liquidity injections
Bottom line:
More money flowing in = upward pressure on stocks. After the slight pullback we’ve had last week, this could be a shift in momentum. Stay alert and watch how the market responds. Remember, as short-term traders, we’re not predicting how we think the market will respond. We’re just reacting to what the charts are telling us.