After a Wednesday in which the markets ended essentially flat after a widely anticipated Federal Reserve rate hike, here's what Todd Gordon of TradingAnalysis.com will be looking at for Thursday.
1. Bond breakout
Bond prices rose meaningfully on Wednesday, as the 10-year yield fell to the lowest level since just after the election. This could be seen as a bit ironic, given that the Fed raised its short-term interest rate target. But soft economic data in the morning — with both retail sales and the consumer price index coming in below expectations — raised fresh question marks about future economic growth and inflation.
"We've seen weak retail sales, CPI data, and a falling dollar that's going to pressure that bond market," Gordon said Wednesday on CNBC's "Trading Nation."
As the meme of declining economic growth potentially continues, Gordon said he will "look for bonds to trade higher."
2. Dollar dip
Alongside a drop in rates has been the slide in the value of the U.S. dollar. The dollar index fell to a 2017 low on Thursday morning, before recovering amid Fed chair Janet Yellen's post-statement press conference. Still, the dollar index has essentially headed lower all year, falling in five out of six months.
With the index at about 97 on Wednesday afternoon, the key level now is 96, Gordon said. If that level is breached, "the dollar bulls are in big trouble, as that would violate a trend that goes all the way back to 2011."
3. Towering Tesla
Tesla has managed to almost completely shrug off the recent drop in momentum stocks. While the stock fell meaningfully on Friday, it regained all of those losses on Monday and Tuesday, and broke to a fresh record high of $384.25 on Wednesday.
At this point, shares of the electric car company have risen by nearly 80 percent in 2017.
"It broke from a three-year base, which is incredibly significant," Gordon said. "I'm going to be looking for a $400 trade in Tesla."