Update January 12 CPI RELEASE 💣
Alright, Alright, Alright
"That's what I love about these markets, man, I get richer, and they stay the same markets"
today is going to be HUGE, I hope!
Wednesday ran up a lot higher than I expected, again Nasdaq outperforming the other indexes.
Here is my theory on the CPI release -
I think inflation shows a decline, I would say a strong decline, but they revised the expectations down (they expect CPI numbers to be way down, i dont like this revision as it makes it easier to miss now). I still believe we beat, I know crazy but here is my reason why -
M2 - M2 is the U.S. Federal Reserve's estimate of the total money supply including all of the cash people have on hand plus all of the money deposited in checking accounts, savings accounts, and other short-term saving vehicles.
this decline is deflationary, this is a much better measure of money demand than it is of money supply. And what does the FED want?... Less Demand, and they got it.
Here are some charts for some core commodities used in manufacturing to show the decline... and future rise
The much talked about Used Cars - A side note with the used cars, used cars are no longer acting as a shortage play and evolved into a collectors play. (iam pointing this out because it's happening with all "collectibles" real value is sorting out, by that I mean when money was rampant anything collectable went up *cars, sports cards, coins, stamps, jewelry etc. but now the prices are falling EXCEPT the best of the best *this is my warning with anything "collectable", just because they are called collectable does not make it so, here is the trick only the best of the best is really worth extra value because it needs to be In the rare value area to hold collectable value, by that i mean the wealthy will want it, if the poor or middle class want it and money gets tight they will not be able to pay for it* so what is holding value *and actually rising* in cars- Ferrari, Lamborghini, Bugatti... in sports cards stamps and coins 1 of 1s and only extremely rare cards are selling, in Jewelry watches had better be Rolex and not "common" rare dates or styles only! in stones; uncut, real, location (Burma, Columbia) rare color and high clarity only. I hold collectables in these having started collecting as a kid so I follow them. here we go: here is a page from silver dollar collectables followed by used cars.
in this chart the further right (higher numbers) the better the quality of the coin.
US Home Prices - see the drop?
That should help show why I believe CPI should be lower. Last Dec the numbers surprised down and the markets sold off (but did NOT make new lows)... Where do the charts leave us.
Nearly every chart is at a pivot point. WHAT CPI DOES COULD SET THE STAGE FOR 2023!!!!!
We are at a point where the next move decides if we are in a BULL or BEAR market.
We have been running hot into CPI, I don't like this (if your keeping track that's 2 bad signs, running hot into a lowered target) we have a little room to the upside left to go still, so a pump and dump is VERY possible.
Here is a daily Nasdaq chart $E-mini NASDAQ 100 Futures(DEC4) (NQmain.US)$ I highlighted the last 2 CPI reports so you can see the similarities and differences between the last reports.... The November report was the first inflation beat, and showed for the first time that inflation was slowing/reversing. The December report showed inflation rose .1% but rose at a slower rate than the .4% in October. 2 FED members spoke after the release and stated the FED had more work to do and rates were scheduled to increase in 2 days at their meeting, which may have contributed to the blow off top.... At it's peak core inflation was 7% (core is what the FED monitors) in the Dec report core came in at 4% but the FED chairs said that was only 1.5% from their target, that means the FEDs target goal of inflation is 2.5%, if core comes anywhere near 2.5 watch the markets 🚀 to🌛 because that would be a sign the FED is done with rates.... After the CPI release at 1130 (2 hrs after open, 3 hrs after CPI) St Louis FED President Bullard speaks, this can absolutely move the market. Bullard is JPows mouthpiece, everything Pow wants to say but can't Bullard says. When all the FED members were saying "transitory" and "no need to raise rates" Bullard was the hawkish angel of death saying the FED was going to raise in 22 and get as high as 5% by year end, and guess what happened? When Bullard speaks - listen, he is the ONLY FED official worth listening to. The last time Bullard spoke (Jan 5) he was remarkably less hawkish, and stated 2023 could be a deflationary year............. On a chart note, a stock usually gets 3 attempts at a breakout (3 strikes rule- if you can't do it in 3 your out) by my eye this looks like a 3rd attempt at the upper cyan trendline.
Pump & Dump is VERY possible (I would put a 70% probability) it happened in December but November led to a 4 day bullish run, that actually continued to the Dec CPI release.
How to tell if it's a pump and dump? If the 5 minute chart never makes a new high and drops below the 18MA (or 20 if you use that) then it's a dump, if MACD drops below 0 line and RSI drops below 30 then it is not consolidating and will most likely continue to fall over the next few days, especially if doesn't break the downtrend that day.
A Bullish Breakout - I wouldn't discount this so easily. Only because no one sees it and everyone is buying for downside protection. The put to call ratio for QQQ was 1.1 which is very bearish but overall the markets were neutral.
CBOE Put to Call ratio (how many puts traded compared to calls) .7 is average, below .7 is bullish, above .7 is bearish.
I believe a bullish breakout is possible in that it would allow the market to gain enough momentum and buyers for the next leg down.... However if the market were to reverse and turn bullish the RSI will become useless for spotting trends as RSI can run hot for days or weeks in bull reversals.
So that's my take on the markets. Here are some signal assets
VIX $VIX Index Futures(DEC4) (VXmain.US)$ 9 count to a reversal. but the important thing is the level, above 20 is still high vix.
HYG - $Ishares Iboxx $ High Yield Corporate Bond Etf (HYG.US)$ High Yield Growth Bonds - how much risk are investors willing to take. Is approaching a new high, that would be bullish.
The stocks I'm in
Tesla $Tesla (TSLA.US)$ I think tesla squeezed yesterday but they stopped it, hopefully we can actually get one today with a good push.
CLF $Cleveland-Cliffs (CLF.US)$ Mostly sold out, only a small position left, if we get good numbers and sustain a run CLF should launch.
SLV $iShares Silver Trust (SLV.US)$ I don't like silver medium term, this was a quick pop play, which I got, I don't think it's sustainable.
got it done an hour before CPI, no time to proof sorry for errors
Be Safe, Be Careful, Be Wise and as always
Good Luck ![]()
if you want to know, yes I played QQQ, Tesla, Mara for huge pops. i have lots of cash waiting on direction. My QQQ is more safe, but still a bullish bet (ITM call spreads, as long as we are over 270 iam good. mara is a 4,5,6 buy sell buy. tesla is a Volatility spread with itm calls)
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Engineer, Commodity Buyer, Alert Bettor,
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Calm922C23 : out?
iamiam OP Calm922C23 : I don't understand, out of what?
iamiam OP : Now I have to get out of bed and really pay attention to my trading, it's almost like work![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
iamiam OP : watch this run, 282-284 qqq or 4000 sp make the market break resistance
Newbee4 : .