Chemicals Ripping Higher, S&P 500 In the Green Ahead of Inauguration

It's been quite a reversal this week for the chemical sector out of oversold territory. Now, DD, WLK, CC, and ALB continue breaking higher.

Action to Take: Futures are catching a bid this morning as markets look to build on yesterday's gains. After weeks of choppy trading and mixed signals, the Fed may have just given us the catalyst.

Fed Governor Waller, typically one of the more hawkish members, struck a surprisingly optimistic tone in his CNBC interview with Sara Eisen yesterday. Noting that this week's inflation readings were "very good," he added, "As long as the data comes in good on inflation or continues on that path, then I can undoubtedly see rate cuts happening sooner than maybe the markets are pricing in. " He even suggested we could see three or four cuts if inflation behaves.

While this should fuel a run into Inauguration Day, we’ll need to carefully navigate next Thursday's BOJ meeting. They've telegraphed this hike better than August's surprise, but Japanese policy shifts tend to trigger profit-taking, particularly if we rally hard into the event. We’ll need to stay nimble, but once we clear the BOJ meeting,…