Good morning
The CPI came in as expected, 6.5%, which led to an initial spike in futures — especially after Fed’s Harker said they’d pause after hiking to 5%. Presently, they guiding rates to match inflation, so the expectation is for the CPI to moderate further during 2023.
Markets don’t seem to give a flying fuck. The NASDAQ has reversed lower, now off by 112.
What’s important to note is the disappointment in the faces of the permanent bulls, truly priceless.
As for me, I bulked up on SOXS, then SQQQ to hedge against pain and quickly closed them out. I’m now hedgeless and not in Seattle, up 34bps for the day.
My algo account is +4%, all in short via SQQQ predicated on the overbought signal that has typically led to sharp reversals lower.
My sense is for moderate pain here, with a potential for a rout. I will be monitoring the market closely and will hedge again if it looks like we are heading for another leg lower.
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The narrative is something akin to “buy the pivot”. Must be the game in play because it makes no sense, even in a no-recession scenario. Valuations are lofty even if earnings remain the same which is unlikely. There is big money to be lost in a revaluation alone.
Rally makes sense in that everyone was bearish AF coming into 2023. We’re retesting the the 2022 lows is basically consensus.
Kelly Evans is pissing in her Republican panties, as she,
like Fly, hopefully and endlessly predict “Recession!”.
Recession, my Joe Biden-supporting old ass!
A no recession assumption would need to include 5% inflation. Not likely.