Inflation Miss! Pullback or Reversal?

In January, consumer prices took a surprise leap, rising 3.1%, causing a bit of a stir in the market. The S&P 500 $S&P 500(.SPX)$ dropped 1.38%, and the NASDAQ $NASDAQ(.IXIC)$ fell by 1.8% on Tuesday. However, the following day brought a different tune as the Producer Price Index (PPI) came in 0.1% lower than anticipated. Chicago Fed President Austan Goolsbee reassured everyone not to overreact to a single inflation report, emphasizing that the underlying trend still indicated a gradual approach to the Fed's 2% target. The market responded positively, with the S&P rising almost 1% and the NASDAQ increasing by 1.3%.

The takeaway from this situation is not to let one data point drive knee-jerk reactions. It's essential to stay steady and make informed decisions. Personally, I took advantage of the market dip on Tuesday by opening a bullish position on the SPDR S&P 500 ETF Trust because I thought the market overreacted and the trend is still bullish, and it turned out to be a profitable move.

Examining the options market, it appears the market is comfortable around the 5050 pts mark in the S&P. Short-term trading might stay within this range unless a significant catalyst emerges – perhaps Nvidia's earnings next week could provide some excitement.

What are your thoughts on the market movements? Feel free to share your insights!

What are your thoughts? Share and comment!

Share your positions with us! This is a column where you can find the winning trades of our fellow tigers. There probably are a few potential opportunities that you may have overlooked.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

KSR
02-19
KSR
👍
Tom Chow
02-19
Tom Chow
good

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