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