The PPI came out just now, completing the inflation data for the month. Yesterday, the CPI came in 66% hotter than expected, and today, the PPI came in 33% hotter.
In contrast with yesterday, however, the market seems to be pretending this is somehow good news, because all the equity futures are GREEN.
Why? Because following yesterday’s plunge, which lasted about as long as a high school senior on a very successful prom night, the market blasted higher all day long. So, irrespective of the data, the market figures stocks will always go up anyway.
The only exception on the screen is crude oil, which continues to slip lower. I’m not sure why (not that it matters), although I suspect that one should respect the fact that with the Russia/Ukraine war on the path to getting solved, all that Russian oil is going to flood the market, and you’re going to see some serious sinkage.
You’ll recall my Not Counting Chickens post from two days ago. I’ve got a doozy of an example for you which, mercifully, isn’t me.
The chap below put his entire portfolio – $389,000 – into February 14 (yeah, they expire tomorrow) $200 RDDT puts. He did this yesterday during market hours, before the earnings report that was issued after the close. Most readers were telling him he was nuts. So, again, he was announcing this on reddit, but the position itself was also on the public entity Reddit. He was all in on a drop.
Well, to his credit, it DID drop. And it dropped hard. As a fellow bear, I was happy for him, because the puts went from out of the money (intrinsically worthless) to VERY in the money by about $27. He looked like he was easily going to score about $300,000 profit overnight, and his reaction was understandable:
As is happening so frequently these days, however, the actual honest-to-God data was ignored, and the stock just climbed all night long. The stock is still going to drop (by about $13 as I am typing this) but it doesn’t matter, because the intrinsic value of these puts is again $0.00 and the time value is scorched.
Our hero didn’t post anything else after his HAHAHA YESYESYES comment, and, sorry, ya just gotta feel bad for the guy, because we’ve all been there in one way or another………but probably not to the tune of our entire portfolio.
Ouch.
