December 9, 2022
A Hotter Than Expected CPI Report Could Sink Stocks Into Year End
LordHenriVoton The CPI report for November is due out on Tuesday, December 13, just one day before next week’s FOMC meeting. Expectations show the y/y rate dropping to 7.3% from last month’s surprise reading of 7.7%. Meanwhile, Core CPI is forecast to remain sticky, rising by 6.1% year-over-year versus last month’s reading of 6.3%. It would be the fourth month in a row that core CPI was above 6%. […]
“They all go together when they go”
Everyone will be focused on the CPI number and actions by the Fed. As a hard and fast rule it is not the news that matters, it is the market’s reaction to the news that is telling. For example, as the bear market becomes more widely acknowledged, more good news is ignored and bad news is exaggerated.
Also, highly anticipated news is used by day and floor traders to run stops with a long bar event. Therefore going into such an event from a tactical point of view, regarding positions longer than a day following a trend, stops are pulled or widened out, because the trend will be your friend. And that trend is down and gaining momentum.
This featured chart of the MSCI ACWI Index, MSCI’s flagship global equity index, helps make the bearish case and points to what to look for that will build confidence for the bearish case.
This ETF is designed to represent the performance of the full opportunity set of large- and mid-cap stocks across 23 developed and 24 emerging markets.
A number of things are clear from both the weekly and daily charts of the world composite. The context of the market is trend ready. That trend is down on an S-T basis as seen in the right-hand window, the breakdown of the channel, our Alpha Trend MA has crossed under, a sell signal, and the market failed to hold the S-T support zone. From an I-T basis, the dot on a close weekly chart is plotted with one of our Vidya MA versions. A close this week below 86.27 would likely close the door on any bullish arguments.
The video below covers the use of the cycle spreadsheet when applied to the S&P and the Dow. Along with that expo, I cover the outlook for the market from now into the early part of 2023.
As always your feedback, questions, or issues are welcomed.
This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International
