Beware of the CPI/PPI with Nick Santiago (Ep #507)

July 10, 2023

For more than 20 years, Master Trader Nick Santiago has been beating the markets. He’s made some incredible calls along the way and now he’s looking to spread the word. There’s no reason that the average trader should be coming up short. So now we’ve started a daily show to bring you up to date on the latest market developments. Nick will be sharing trades and concepts and discussing current trends.

Today:

1. Last week, the major stock indexes pulled back a little from a very overbought condition. This week will be interesting as we get the CPI report on Wednesday and the PPI report on Thursday. Every trader and investor will be looking for signs of inflation. Remember, the FOMC (Fed) will hold their interest rate policy meeting on July 26th. As I have said before, the most important metric is going to be the reaction in the 2-year treasury note yield. Today, the 2year note yield is around 4.92%. Last week, this got above 5% and that spooked the markets as it indicates the Fed is behind the curve when it comes to hiking the fed funds rate. Every investor should keep a close eye on the 2 year yield.

2. Earnings season starts up later this week with JP Morgan Chase (JPM) and the many other financial stocks. Remember, my theory is that the rally from March has been because of the financial crisis. Obviously, liquidity programs by the central banks help to lift markets.

3. Gold and silver are flat today. Both were very choppy and range bound last week. There still looks like a potential bearish pattern is forming in the precious metals, but it wont take a lot to change that. I’m just continuing to let things unfold, but i’m itching to get back into silver related plays soon.

4. Bitcoin has been strong recently and that still remains the case. The commercial money has switched back to the long side so I’m continuing to give bitcoin an upside bias in the near term.

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