Yesterday morning’s report, the CPI, came in rather hot, and equities went up. This morning’s report, the PPI, came in stone cold, and……..equities went up. Magic, eh? In any case, you can see here the projected PPI (gold bar) versus the actual data (blue bar). So it seems all the inflation chatter might calm down, since the government data reflects it is perhaps transitory, in spite of all the evidence before you every time you shop.
As of this moment (and I always have to say that, since magical fairy dust appears when the cash market opens, and sometimes big reversals can transpire) the screen is entirely green; here is the pop higher that the ES enjoyed on the PPI news.
Longer-term, the Battle of the Patterns is close to commencing, since we are approaching the mass of overhead resistance which preceded the big sell-off (remember that?). The easy gains are done.
In the midst of all this buying, of course, volatility (and options premiums) have proceeded to free-fall, and we’re back in the head-shaking, pathetic mid-teens range for the VIX. You gotta give it to ’em – – when it comes to market control, the Federal Reserve has got this game mastered.