Can someone help me understand today's events? When the CPI report came out, since the results were relatively positive, there was a rally at market open. This makes sense to me. I was fortunate enough to sell near today's highs because I felt like I understood this.
When the Fed started commenting their usual hawkish comments, there was an immediate sell off and share prices dropped. So far, this makes sense to me.
However, what I don't understand is what I believe to be an overreaction or overcorrection to the Fed comments. If you take a stock like AT&T (T) for example, today's peak after the CPI report was around 18.90ish. After Fed comments, the sell off immediately began. It makes sense that traders who were in good positions and timed the market correctly would want to sell off to capture their gains. However, the price continued to plummet until it completely reversed the gains for the day in response to the CPI report. I guess I'm a bit surprised and can't wrap my head around why traders would sell to the point of completely negating the CPI report gains completely. What would late sellers have to gain from selling near today's lows?
I get that the day isn't over yet. But I would like to frame my question around the two isolated events I described above. Can someone help me understand the over sell off?
Thank you. I've been trading for maybe a year now, and tend to be as conservative as possible. I've been slowly learning how to anticipate certain market events (e.g. I was able to anticipate the market reactions to the U.S. election result uncertainties and the anticipation around the CPI report), but I have so much more to learn about intra-day (same day?) fluctuations. Thank you in advance for your insight.
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