sneaky business

cpi rosed more than expected to 3.2% in feb as opposed to expected 3.1%. the mainstream news brushed off the 0.1% difference and emphasized more on the rally that followed. in contrast, when china gdpmissed forecast of 5.3% by 0.1%, the mainstream media focused on the 0.1% difference and gave a gloomy outlook. even though the china economy beat the chinese government target of 5% for 2023. 

hsi rebounded from the recent low and made a new high, despite the gloomy outlook. hence, we better beware of sudden pullbacks given the rosy outlook of the us market brushing of the bigger than expected cpi.

$SPDR S&P 500 ETF Trust(SPY)$  should be bearish in the short term after a huge run up. The fed's preferred inflation measure revealed that prices rose markedly on a monthly basis, fueling concerns that the task of reigning in the cost of living could be far from over.

the core personal consumption expenditures price index, which excludes the volatile costs of food and energy, increased 0.4% on a monthly basis in jan. that's compared to registering just 0.1% in a revised dec rate. the reported increase was in line with expectations.

the picture looked slightly less bleak when looking at the annual pace. core PCE rose 2.8% year over year in jan. that's a slightly slower pace than the 2.9% in dec, but much of that decline is due to comparisons to 2023 when inflation was higher.

in the long run, the bull rally will last for at least 4 years. pullbacks are normal for a healthy market. the fed is not eager to cut interest rate as the inflation is still stubborn. spy can go up to 550 according to Fibonacci retracement estimate. in the short term, spy may retrace to 450. there are quite a number of gap ups. 

$FTSE 100(.UKX.UK)$ is hovering at the same zone after making new all time high. it is most likely waiting for fed to cut interest rate.

$US2Y(US2Y.BOND)$ rallies as the fed is not ready to cut interest rate. 

do apply automatic investment system where you add shares at each 10% drop or at support zones if you know technical analysis. this way you conserve your capital while the stock is strongly downtrending. do take profit at 10% intervals or at resistance zones if you know technical analysis. this way you have capital to buy the dip. only applies to stocks in an index or warren buffett would approve. bon courage.

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