Hey friend,
The big CPI report came in earlier this morning.
And surprisingly…
It showed the CPI dropping by 0.4% on a monthly basis…
While coming in significantly below estimates on a yearly basis (3.5% actual vs 3.8% forecast).
If this trend continues, this may give the Fed justification to not raise rates this year.
Let’s see how the markets have been moving.
The Daily Direction
Note: All indexes closed lower yesterday but opened generally higher this morning. No change in any index directions.
The Daily Nugget
When reading the news, think about how other people will react to the news.
Most people read a market headline and immediately decide whether it’s bullish or bearish.
But markets are rarely that simple.
A weak earnings report can send a stock higher if traders were expecting something even worse.
A strong economic report can send stocks lower if it makes rate cuts less likely.
And bad news can sometimes spark a rally when too many traders were already positioned for disaster.
So don’t just ask:
“What does this news mean?”
Also ask:
“How will other traders react to it?”
What were they expecting?
How are they already positioned?
And could the obvious reaction already be priced in?
That second-order view often explains why markets react in ways that seem completely illogical at first.
And given everything going on right now…
With the Iran conflict restarting…
To the continued weakness in memory stocks…
There is a lot of newsflow coming out to react to.
That’s why tomorrow…
Head Trader Ross Givens will share how he uses this second-order lens to target explosive trades most people never even see.
So make sure you keep an eye on your inbox for all the details.
But in the meantime, despite all this volatility…
Remember that the bull market is far from over.
The Traders Agency Team
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