Missing the forest for the trees
The Iran conflict is dominating the headlines, but the real story driving markets this year is US inflation.
Right on cue, this morning’s inflation data didn’t shake anything up: core annual inflation for February came in at +2.5%, same as January.
There’s a catch, though. These numbers only cover the second half of February, right before Operation Epic Fury kicked off and oil prices shot higher. Estimates suggest that oil at $100 a barrel would push inflation up by +0.7 percentage points.
With inflation already running well above the Fed’s 2% target, rising energy prices on top of tariff pressures is a real risk that markets won’t be able to brush off when the March data drops.
The retrospective
Short sellers pushed down to the symbolic 47,500-point level early in the session [1] before buyers stepped in, lifted by solid US housing data.
Despite breaking through Monthly Support 1 [2], buyers couldn’t sustain the momentum. Selling pressure returned into the close and the downtrend reasserted itself.
Today's trading plan
*This is not investment advice. This trading plan is shared purely for educational purposes, to give you a window into one veteran trader’s preparation and reasoning.*
With no real selling pressure yesterday, the market continued its bounce. That said, sellers are still in control until proven otherwise. With that in mind, I’m staying short, targeting buyer stop-losses in the 46,333-point kill zone.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
The phony war
Controlled Skid
Peace pipe