Financial News vs. Noise
I saw the above diagram and thought it laid out the market situation perfectly. Yesterday CPI came in hotter than expected, so the market rallied. My guess, and it’s only a guess, is that traders had hedged up pretty well in expectation of a much worse number, but we will see. Kind of thought I would wake up to red this morning, but things look flat at the moment. Interestingly Treasuries, commodities, and gold all acted as you would have expected. I have said before that if I had to bet on the bond guys or the stock guys, I would take the bond guys. I have seen two other excuses for yesterday’s stock move:
Improvement in the Supercore Ex Housing and Owners Equivalent Rent
Oracle’s guidance about AI demand
At the moment it looks like the market is still expecting a June rate cut, however, I have to think more numbers like this push things out.
Did end up taking a bunch of profits and adding to hedges with some outright SPY puts, still pretty net long , but feel better with SPY put spreads, IWM puts, and outright SPY puts.
So far looks like the action today will be in the crypto space as Bitcoin is back up along with all the miners. I am still long BITO calls, MARA, CLSK, and COIN.
Was asked yesterday about bonds. I don’t think that’s where the action is at the moment. I do hold some TLT in a longer term strategy and have been flipping back and forth between puts and calls in my systematic trading account. Yesterday we sold our puts and went flat.
TLT had a massive move from October through December and dones’t seem to be able to make it’s mind up on direction at the moment.
Nothing else looks interesting at the moment, PPI is tomorrow so reasonable to expect the market to flatline today.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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