Traders Eye CPI And PPI As Market Sentiment Remains Cautiously Optimistic

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[Chart courtesy of]

  1. Moving the markets

The major indexes inched higher this morning with the S&P 500 rising to a new record, after having advanced for its 4th week out of the last five. This move was supported by hopes that allegedly easing inflation in combination with a weakening economy could cause the Fed to cut interest rates. In the end, a sluggish session did not create much activity.

Traders are now eyeing the June CPI, which is due out on Thursday. That is followed by the PPI on Friday. As usual, the algos will primarily jump on the headline numbers and drive the indexes either up or down. Still, optimism prevails that a weaker figure will show improvement so that current bullish sentiment can be sustained.

Last Friday’s labor data showed an increase in non-farm payrolls of 206k and an uptick in the unemployment rate to 4.1% vs. expectations of 4.0%. Looking under the hood, it turned out that the past two months of data were revised and did not show any meaningful job gains. I expect the same to happen next month when it’s revision time again. Go figure…

The most shorted stocks provided chaotic trading, during which we saw an early squeeze, which lost steam as the session wore on. The MAG 7 stocks trod water, as bond yields were stuck in a tight trading range.  

The dollar was subdued, while crude oil lost its $83 level again. Bitcoin rode the rollercoaster all weekend and gave new meaning to the words dump, pump and dump. Gold’s Friday ramp ran into overhead resistance with the precious metal losing about 1%.

It was a session mired in uncertainty, but the upcoming inflation numbers will surely light some fires.  

2. Current “Buy” Cycles (effective 11/21/2023)

Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.

If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.

3. Trend Tracking Indexes (TTIs)

Despite the S&P 500 inching into record territory, the session was uninspiring at best. Our TTIs barely moved, so our outlook remains bullish.

This is how we closed 07/08/2024:

Domestic TTI: +4.69% above its M/A (prior close +4.47%)—Buy signal effective 11/21/2023.

International TTI: +7.34% above its M/A (prior close +7.49%)—Buy signal effective 11/21/2023.

All linked charts above are courtesy of Bloomberg via ZeroHedge.



Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly to get more details.

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