CPI is Brutal – Here’s My Plan

The CPI number is out – CPI-U (tracks retail prices affecting urban consumers) increased a crippling 9.1% over the past 12 months… and CPI-W (tracks retail prices affecting urban hourly-wage earners) increased by a staggering 9.8% over the last 12-month period.

So what does this mean for us?

CPI directly relates to inflation – if prices are going up, that means inflation is on the rise.

This is another 40-year high for CPI, and this means it’s very likely that the Fed will release another significant rate hike this month.

(Here, Garrett Baldwin explains why the Fed reacts to inflation by increasing interest rates.)

The CPI number on its own is just a headline number…

I only care about how it affects the markets.

And this morning, we are seeing some buy-back from the early sell-off.

SPY has recovered up to 379.62 from the dip below 375 near the open.

The CPI number is bad news… on the surface.

But as a trader, I can find the good – and the profits – in any market situation.

And I’ve got a way to turn this “bad news” into a trade.

First off, we will be taking profits in meme names today in the Profit Revolution.

We had a short position on UBER that’s doing really well in particular, and it’s time to take some dollars off the table there.

I will also be taking a look at BBBY to find an inexpensive play to go short.

Implied Volatility (IV30 – RED LINE) is fairly stable on BBBY, so we might find an inexpensive put here.

After that, my friend and bond expert, Bill Griffo, is visiting the Profit Revolution today to unpack the truth from the lies the Fed is telling us and what that could mean for the market…

Until next time,

Mark Sebastian

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