S&P 500 bears managed to push prices down on declining volume, and the risk-on upswing in bonds was dialed back. VIX remains elevated while the put to call ratio didn‘t point to rising fear yesterday, and the dollar made no progress while long-dated yields retreated. These are all signs of caution, and do not invalidate my fundamental thesis of seeing stocks potentially spike up on CPI before the still tightening Fed reality sets in again – as described in the below quote from yesterday‘s analysis. The only fly in the ointment is that today‘s premarket didn‘t offer advance clues as to which way the wind is blowing immediately before the CPI data release:
(…) I‘m expecting a sticky CPI and core CPI figure tomorrow – given the price action so far, any potentially positive initial market reaction would be sold into. True, I‘m not looking for such a low CPI figure that would facilitate lasting gains – the sideways trading witnessed currently favors the bears assuming initiative tomorrow. Unless we very decisively close above my 3,635 level with outside markets confirming (unlikely to happen) – if so, I would definitely tweet about that.
The real assets premarket upswing is bucked by cryptos plunging, so the picture with respect to CPI is inconclusive here as well. I‘ll keep updating you throughout the day if any change is posture or positioning is warranted based on the market reaction with Fed tightening reassessment.
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All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.
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