Morning Notes – 7/13/2022
Good Morning:
- This morning, I am a little under the weather as I have caught a summer cold.
- I will be grabbing some rest on this otherwise volatile CPI report day.
- The street already expects the headline number to be bad.
- And with commodity prices from Oil to Copper crashing for the last few weeks, the headline number is stale anyway.
- Inflation has peaked – at least short term. Earnings and recession are now the focus of the Alka-Seltzer crowd.
- A spike low down to 3400 or 3500 is possible on the report’s release.
- I would favor longs over shorts in such an event.
- A ton of cash on the sidelines could easily chase the markets higher if FOMO kicks in.
- We still have monthly options expiration weighing on the markets through Friday, which might hold any meaningful rally back until next week.
- And, of course, there are those exogenous global events such as Nuclear War to consider.
- The WEM low at 3833 drew the market back up overnight and will be a key magnet through Friday. Any sustained trading below 3800 will make the dealers start hedging their WEM low level and exaggerate losses.
- We have a plus or minus 60 points expected move on the day.
- My advice is to sit this out, let the market settle in, and then get aligned with the positive or negative trend.
- Suppose we get a spike, panic low. I will send out an alert if I see a bottom. If we get a panic rally, I will do the same.
- And we still have to traverse the wholesale inflation number tomorrow.
As always, good luck and stay tuned.
A.F. Thornton
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