By: Steve Smith
Yesterday morning we got the report for April’s CPI number, and it was the highest monthly CPI since the ’80s.
Understandably some people are concerned about what that means for the economy…
But we aren’t here to talk about the economy, we are here to talk about trading.
And I have to tell you, I’m cautiously excited about what this could mean for us as traders.
Keep in mind the DXY is still maintaining above 90. That’s a strong number when you take into account the history of the index.
In 2008 the DXY broke below 75, and we kept revisiting the low 70’s into 2011. So staying above 90 means the dollar is maintaining strength.
Furthermore, we are coming out of the pandemic recession. That means we can expect some prices to go up. Arguably they were suppressed through 2020…
So some surges in prices are natural.
Now it is up to the Fed to manage this properly (and on the government to allow them to manage it properly), now that the economy is coming back.
For example, maybe they could consider slowing (or stopping) the purchase of mortgage-backed securities.
Housing demand is off the charts, the economy doesn’t really need support in that area.
For traders like us, it’s still important to follow the plan.
In Options360 that plan includes picking positions carefully, a short time horizon on our trades, and cutting a position that goes against us quickly rather than trying to “ride it out.”
The rest of this year should be interesting, fun, and – I believe – profitable.
I’ve been calling for an amazing 2021 for my Options360 subscribers. If you have not taken your “$19 test drive,” then what are you waiting for?
To Your Success,