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Re: Inflation report; help me understand market reaction.

Posted on 5/11/22 at 9:56 am
Posted by Lsut81
Member since Jun 2005
85316 posts
Posted on 5/11/22 at 9:56 am
So reports beforehand was this report would show inflation had peaked and started to pull back… ie. good news

It didn’t and remains 40yr high, which means fed will have to increase rates same or even faster. .75 prob on table.

So why is market up 300pts?
Posted by OceanMan
Member since Mar 2010
23275 posts
Posted on 5/11/22 at 10:04 am to
The market is volatile right now. You will see big ups and downs.

Short term plays are a huge factor in the market when it comes to short term pricing.
Posted by tgrmeat
Member since Sep 2020
5824 posts
Posted on 5/11/22 at 10:04 am to
Nothing makes any sense anymore.
Posted by SlidellCajun
Slidell la
Member since May 2019
16493 posts
Posted on 5/11/22 at 10:07 am to
I think it’s because of the slowdown in the pace of increase in inflation.

Inflation is increasing but at a slower rate

This indicates that the fed tightening is working
Posted by Pendulum
Member since Jan 2009
8088 posts
Posted on 5/11/22 at 10:08 am to
Look at treasuries. The market pretty much is a tail that is wagged by 10yr. It's not as forward looking as you'd like to hope. I feel like algo's just key off the 10yr. You would have to assume 10yr is going up long term, so here's your chance to outperform the algo's who dont believe it until they see it. 10yr will probably be up by end of the day and I'd wager the market will be red when we see it.
Posted by holdem Tiger
Member since Oct 2007
1286 posts
Posted on 5/11/22 at 10:14 am to
It was an interesting reaction. The knee-jerk was the expected selloff but the strength since then is unexpected.

Generally that would be a bullish sign. Considering closing my shorts. I will wait to see how far this current pullback goes and then decide. Will stay short minded for the foreseeable future, but I’m just a trader with a very short time horizon
Posted by UpstairsComputer
Prairieville
Member since Jan 2017
1821 posts
Posted on 5/11/22 at 10:14 am to
Watch the S&P, not the Dow for starters. It's a short covering rally and dealers covering their options positions - usually on the 50's. Down 100, up 100. Been doing this for weeks. Average range has been like 87 since January.

Posted by Lsut81
Member since Jun 2005
85316 posts
Posted on 5/11/22 at 10:14 am to
quote:

think it’s because of the slowdown in the pace of increase in inflation.


I mean you can only clip away at a rate so long… but this doesn’t change any of the other issues out there. Everything still fricking sucks with indications only getting worse

I mean gas hit a new high yesterday.

Just don’t understand the market, not like I ever did though
Posted by holdem Tiger
Member since Oct 2007
1286 posts
Posted on 5/11/22 at 10:38 am to
Yep. Risk is to the upside today. I flipped.

Probably overheated sentiment and options effects as mentioned above
Posted by wutangfinancial
Treasure Valley
Member since Sep 2015
11962 posts
Posted on 5/11/22 at 11:09 am to
Funny enough, it's probably the same situation with rates
Posted by Lsut81
Member since Jun 2005
85316 posts
Posted on 5/11/22 at 11:46 am to
And like that, we are negative across the board…
Posted by LSUcam7
FL
Member since Sep 2016
8981 posts
Posted on 5/11/22 at 11:50 am to
quote:

negative across the board


Dow is still green

Value up .50-.75%

Dividend stocks up 0.75-1.00%
Posted by Lsut81
Member since Jun 2005
85316 posts
Posted on 5/11/22 at 11:51 am to
quote:

Dow is still green


It just bounced, was -20 when I posted that.
Posted by LSUcam7
FL
Member since Sep 2016
8981 posts
Posted on 5/11/22 at 11:57 am to
quote:

It just bounced


It just dropped

Posted by LSU82BILL
Fort Lauderdale, FL
Member since Sep 2006
10978 posts
Posted on 5/11/22 at 12:08 pm to
quote:

So why is market up 300pts?


Posted by Lsut81
Member since Jun 2005
85316 posts
Posted on 5/11/22 at 12:10 pm to
Now we’re gaining steam down. Daq down 2.5% and dow down 130pts
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