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UVXY, TQQQ, SQQQ, SPY – CPI Data Release

November 10, 2022 @ 8:30 am

The CPI is the inflation report for the previous month.  This is a MARKET-wide catalyst, it will impact all trading.  This will not always be on the Catalyst Calendar, but at least until late 2023, these numbers will have a lot of impact on how the market reacts that day.

The market reaction is what traders will be looking take advantage of, so there are two (if not more) opportunities to consider.

  1. The runup period.  For the 2 weeks before the CPI is released, it could become the focus point on the news, which inevitably will have an impact on the market.  If everyone is talking about how “scared” we should be about the inflation numbers, the reaction to bad numbers could become “baked in,” meaning that at some point during that week or two runup period, the market would be dropping in anticipation of bad numbers.  In this case, “bad” would mean anything more than forecast that would incentivize the Fed to raise interest rates more aggressively for a longer period of time.  In this case you might see traders using Inverse ETF or ETNs like UVXY, HIBS, TECS, SOXS (if you don’t know what those are you absolutely need to learn more before you EVER trade them, research is more than heavily recommended about these), or even SPY Puts perhaps.
  2. The day of announcement.  If inflation is dropping or comes in lower then expected –OR if it improves after a surprise bad report the month previous–the market probably will react favorably to that, since it would be an indication that the fed could lighten up on the interest rate increases if they wanted.  If the market had reacted negatively to potentially bad news, and then inflation comes in better than expected, “Event” traders might choose to quickly use SPY Calls, or “Long” ETF and ETNs like TQQQ, SOXL, LABU, etc.

Details

Date:
November 10, 2022
Time:
8:30 am
Series: