CPI index out, Stochastics Down, MACD down --> SHORT --> $620 profits
5 minutes Emini Nasdaq 100 Chart
Hi,
The CPI numbers are inline with market expectations and there is little that we should expect in terms of a market overreaction... we can do now is to watch how price moves.... nothing beats pure price action when it comes to profiting from the stock market...
At 10:25, price started to show some weakness and I am beginning to see the stochastics and short-term MACD starting to cut downwards, I shorted 1 contract at 1768 and another 2 contracts at 1765.5 at 10:40 when it broke through one of my moving averages... It was smooth sailing from there... I got out at 1756 with $620 profits... ( notice how the stochastics and MACD actually went up shortly after my exit? see the orange circles)
From Briefing.com
The February core CPI was up 0.2%. This was comforting to the financial markets. The more volatile core PPI was reported up 0.4% yesterday. It raised concerns the core CPI might also surprise on the up side. But inflationary pressures aren't the market's main concern. Economic demand simply isn't strong enough to support higher levels of inflation, despite increasing wage gain. The year-over-year increase in the core CPI is at 2.7%. That is higher than the Fed would like to see. It will decline, however, in the months ahead as high numbers drop off the back end of the calculation.
The stock market's main concern is potential economic weakness. There is as of yet no real evidence that economic growth is taking a dive. A survey by the Wall Street Journal yesterday showed that only 19% of economists believe it is "very likely" that sub-prime mortgage problems will impact the prime market. Another 36% say it is "somewhat likely" there will be some impact, so the headline on the article naturally screams "Subprime Mortgage Woes are Likely to Spread," but that is misleading. We even think it is somewhat likely to have some impact on other mortgages, but have consistently downplayed the overall risk.
The bottom line on the survey is that 78% of economists say the sub-prime mortgage issue has not altered their GDP forecasts. The average first quarter forecast for annualized real GDP growth has inched lower to 2.3% from 2.5%. That is a very reasonable expectation, in our opinion.