CPI 3.0% Markets Rally
Technical charts
Ok so the number was a whisper below expectations and the markets liked it, as Headline CPI came in at 3.0% MoM vs 3.1% exp and Core dropped to 4.8% YoY:
With the money supply post covid increase dwindling and spending collapsing as noted with yesterday’s abysmal Redbook and Credit numbers (Big miss on consumer credit US consumer credit $7.24B (exp. $20B, prev. month $23B)
Enough time has passed to tell us that there isn’t really much more room for Powell and Company to use higher rates to defend the US dollar. If the whisper rumor that we heard yesterday that the new BRICs alliance will allow US dollar/IMF defaults and still qualify for a BRICs loan, then this is a very, very big deal…How much of the inflation is trust in the currency? How much of the inflation is too many printed credit dollars? How much of the actual inflation is sticky or persistent? Look Magnelibra has been around for decades and we know monetary policy and understand it in a way that is both academic and well experienced, the best of both worlds if you will. How many that work at the FRB actually had real jobs, with real money and wages at risk, where ones assessment of the monetary mechanisms was the difference between rags or riches…very few we bet…
This is why we started this newsletter, to take what we have learned and apply it in real time to the current situations. The world is not linear, its chaotic and fitting, back testing and fitting again is a kin to just playing follow the leader, over and over again. We know better, we know that the current monetary regime is about Modigliani-Miller principles and swapping all organic profit centers for debt ridden levered opportunities. Higher rates and a less trustworthy dollar have changed this landscape. First we saw the Nasdaq jump pretty good to then succumb to a consistent HFT seller, but now that seller has turned buyer or a new HFT buyer has emerged and 13350 becomes the defacto defended level now:
Also we are seeing a nice bottom being put in for the Sept Ten Yr futures and all of Fixed Income today in fact, but the Ten Year chart seems poised to want to reassert itself into the prior trend channel:
Also the Yen continues its bounce from that BOJ intervention area we continue to highlight with a nice move today again:
Finally Crude Oil has broken the down trend channel for the second time in 4 months will see if sellers emerge at our equilibrium level of $75.98 or if stops run above:
OK we will be back later for our subscriber tracker updates! If you haven’t subscribed, if your an avid investor, trader and or like daily updates on the futures and equity markets and commentary on how the days trading transpires then think about becoming a member. Many investors blindly pay 0.5% to invest in mutual funds which do nothing more than buy and hold, paying others to do something you could do yourself very easily with a little work and a little knowledge…we give you enough knowledge, enough reasons to research more and its up to you to decide what your money and time is worth. Knowledge is essential and its the key to a civil and just society, which is why there is not a single set price for it, only a value metric by which the individual must quantify!
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