Chart Check (see above)
Don't blame the messenger
We continue to live in our downtrend channel. We may push the boundaries of resistance/support a little bit, but I expect the downtrend to continue for now (especially as the Fed “plans” to unload the balance sheet). I haven’t spoken about the 50 and 200 DMA in a little while but wanted to show how there is no indication of the 50 DMA (black line) crossing over the 200 DMA (blue line). Remember, when the 50 DMA crosses over the 200 DMA from below to on top, that is a bullish (lagging) indicator and we can expect the trend for lower rates to be in motion.
We have a very important start to the week with inflation numbers being reported. The median forecast for Tuesday’s CPI numbers is 8.4%. This is up from 7.9% a month ago. I personally think the number will be higher as there has nothing to suggest otherwise. The crazy thing is that 7.9% (or 8.4% forecast) is what’s being reported but the actual inflation number is arguably in the mid-teens.
In The News
Monday
- 1 year inflation expectation
- 3 year inflation expectation
Tuesday
- Core CPI (monthly and year over year)
- CPI (year over year)
- Fed Gov Brainard Speaks
- Richmond Fed President Barking Speaks
Thursday
- Initial and continuing jobless claims
- 5 year inflation expectations
- Cleveland Fed President Mester Speaks
- Philadelphia Fed President Harker Speaks
Next week we get a lot of housing numbers
I didn’t float into the weekend/Monday. I don’t see any reason for inflation to begin its decline yet and expect these inflationary numbers to surpass expectations. I hope I’m wrong.
That’s it for this week. Please let me know if you have any questions whatsoever and I’ll be more than happy to answer them. Or if you have any alternative ideas, I would love to dive into a deep discussion into that as well.
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