By Jeff Clark, editor, Market Minute Today could be a wild session for the stock market… The consumer price index (CPI) – a widely followed measure of inflation – for November will release at 8:30 a.m. ET. And today’s report may give traders a glimpse at the future direction of interest rates. A “hot” report showing persistent inflation will keep pressure on the Fed to raise interest rates even more. A “cold” report showing a lower-than-expected CPI, could give the Fed a reason to pause. Either way, today’s number is likely to spark a big move in the stock market – in one direction or the other. Take a look at this chart of the S&P 500… 
(Click here to expand image) The blue arrows point to the action following the past three CPI reports. Those were some of the biggest one-day moves we’ve seen all year. The stock market was rallying going into the release of the CPI report on September 13. The index lost 180 points that day – the stock market’s worst day in two years. And the S&P 500 was falling going into the October 13 release of the CPI report. The index gained 90 points following a hot report. It gave up most of those gains the next trading day. In November, the CPI report showed inflation was cooling off. The S&P 500 exploded 200 points higher – logging the best day of the year for the stock market... So today’s report is likely to be the catalyst for a big move. The question of course is… Which way? I don’t see an edge to either direction. Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. | The S&P 500 is trading near the same level it hit following the November 10 report. It has neither gained, nor lost ground. There are plenty of bearish technical indicators that support a move to the downside. But seasonal factors and investor sentiment (a contrary indicator) support a bullish move. Betting on today’s direction seems to be nothing better than a 50/50 proposition. There’s no edge. And when there’s no edge, it’s better to not make the trade. Whenever there is the potential for a big move in the markets, traders feel pressured to take a position. Just think of the gains you’ll be missing out on if you don’t place a trade. That’s the gambler’s thought process – focusing on the reward and ignoring the risk. Successful traders focus on risk. We look for conditions that reduce our risk and increase the probability of a profitable trade. Financial genius reveals unusual investment strategy that works in ANY market If we can’t find those conditions, we stay on the sidelines. And we ignore FOMO (the fear of missing out) on a trade. Today is likely to be a wild day in the stock market. Gamblers who bet on the right direction will profit. Gamblers who bet wrong will lose. But most traders are better off avoiding the casino – for today. Best regards and good trading, Jeff Clark Reader Mailbag In today’s mailbag, a Jeff Clark Trader member shares his thoughts on Jeff’s recent essay on gold… I see the price of gold reaching new heights as confidence in the dollar wanes. And when markets are down, historically there’s a tendency to buy gold as a safe haven. – Derek G. Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at feedback@jeffclarktrader.com. | 
0 Comments