What Does Yesterday’s CPI Mean to You?

What Does Yesterday’s CPI Mean to You?

Posted On May 13, 2021 2:22 pm

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. 

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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.  

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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?

Click here and we can ride together!

To Your Success,



About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.