4/11 Is Inflation Real?
PPI sets up an interesting market proposition, Bank Earnings
Index
I. Forward
II. Reflection
III. Markets
IV. Analysis and Commentary
WIZ CHARTS CHAT
Education & Resources Page
Forward
We got a very interesting PPI today, on top of an interesting bond auction, that didn’t steel up the market breaking down nor breaking higher.
After a weak set of ERs this morning, it all comes down to Bank Earnings tomorrow morning, and the option flow on them is a bit shocking what they’re predicting.
We are going to look at all of that tonight.
Additionally, Monday is the last day to sign up for wiz stack at a MAJOR discount, I don’t do discounts all year like some FURUs just trying to keep their sub numbers up. This is my only offering on the year for a significant discount. I hope you join up with the tribe. :)
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Reflection
I think it’s very easy to feel unconfident when a new market move starts, and disregarding whether this current market momentum is a new shift in trend, dipping your toes in can be a tough thing.
I think some of the best things I’ve learned when a trend is still new is
A. Making sure that you aren’t going heavy on risk exposure. If your normal play is 3k, you start with 300 as the set aside instead.
B. Letting the play play out and not flippy flopping ala death by a million paper cuts. With the reduced exposure, you should be able to let the play play out farther than you normally would, and let it try to get started.
C. Average Up when momentum starts to kick in. When it’s still relatively new, let the play start and then add to it.
Markets
The only real question from today is should we believe the market pop in end of day?
As we saw above, PPI came in lower, while CPI came in higher on Wednesday. But what does this actually mean, and what does it mean for the PCE reading that the fed will go off of?
Also why are corporations still pushing end prices higher (CPI), when they aren’t feeling the effects of inflation?
I think for the most part we learned a lot, but to complete the picture, we are going to need bank earnings to give us some color on what is actually going on with individual accounts and how strong their balances actually are.
if we look at the actual mechanics of the stock market, such as HYG, EUR/USD, VIX, two of the three are telling us the same story. HYG, so I continued outflow throughout the entire day. This suggest that liquidity is still exiting the system. On top of that EUR/USD is in a head and shoulders pattern. It wasn’t able to hit the qualifier that I have that would allow us to start going back to full risk on.