The consumer price report came out soft this morning, and it didn’t mean squat.
I know how that sounds. We watch the CPI all morning long. It’s the number everybody braces for. So watch what the market did with it.
Take a look at oil. Oil’s ripping again, up overnight, and nobody cared about the inflation print sitting right next to it.
The number came out, prices fell more than expected, and the tape barely blinked. That was your CPI report, ladies and gentlemen. It meant almost nothing.
This is the trap. You circle the data on your calendar, you decide that’s the thing that moves the market, and then the number hits and the market shrugs.
The event was never the driver. You were just told it would be.
So if the data isn’t driving, what is?
Go look at the tape, it tells you in about two seconds.
This morning it was semiconductors. The NASDAQ had a bid under it because of the chips, and that was the whole story. Micron, AMD, Intel, the usual suspects. Does anything else matter right now? Absolutely not.
Look how simple it was. The market liquidated the 52-week low sectors and piled into Goldman.
Buy the semis because of ASML. Buy Goldman. That’s enough to lift the whole market up 10 points. That’s what it is. Ten points. Not the CPI. Semis and Goldman.
So that’s the skill. Not predicting the CPI. Watching what the market goes after once the number’s out of the way. The headline everybody’s staring at and the thing moving the tape are usually two completely different things.
And look how scattered the rest of it was. Financials reported and came in all over the board, Goldman up, JP Morgan down, nothing to read into. The Dow doesn’t know what to do.
It just doesn’t know what to do. Walmart’s up, Costco’s down. If you were trying to trade the CPI reaction, you got chopped up. If you were watching the semis, you had the one clean read on the screen.
Now, some reports do move markets. I’m not telling you data never matters. I’m telling you you don’t get to decide in advance which ones do. The market decides, and it shows you in the first few minutes after the release by what it does.
So next time a big number drops and you feel that pull to trade it, slow down.
Let it hit.
Then go look at what’s bid, what’s offered, what’s leading, and what nobody cares about.
That reaction is the real report.
Not the number everybody circled. Get good at reading it and you’ll quit getting faked out by headlines that were never driving the tape in the first place.
To your success,
Don Kaufman
P.S. Quick thing. I’m doing a live training Thursday at 1pm where I’m walking through the updated Xmas Tree setup. For years this trade only fired during volatile stretches. Now I’ve adjusted the entry rules so it works in quiet markets too. That means you’re not sitting on your hands waiting for chaos. I’m building one live during the session using current conditions. It’s free, just register.
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