The headline says two big things. Then it names one thing. Inflation data. That's one thing. The second big thing apparently didn't make it past the editor's lunch break.
July inflation data drops this week and retail traders will stare at it like it's a treasure map. It's not. It's a rearview mirror wrapped in seasonal adjustments and hedonics that assume your iPhone got better so your rent going up doesn't count. The Bureau of Labor Statistics will release a number. That number will have been true six weeks ago. The market will pretend it matters now.
Here's what happens next. The CPI print comes in at 3.2% and some guy named Derek who works in accounts receivable will check his Robinhood app and think he understands monetary policy. He doesn't. He's about to buy calls on a leveraged ETF because a YouTube thumbnail had a rocket emoji.
The technical picture doesn't care about inflation. The 50-day moving average doesn't read press releases. Support and resistance levels formed before Jerome Powell learned what a basis point was and they'll be there after he's gone. But sure, let's all pretend that a backwards-looking government statistic about the cost of used cars and owners' equivalent rent will tell us where the S&P closes on Friday.
Traders will parse the core versus headline number. They'll debate supercore inflation like it's a real thing and not just a term someone made up in 2022 to sound smart on CNBC. They'll completely ignore that the market already priced in twelve different scenarios before the data even existed.
The article promises two big things. It delivers one thing that already happened and zero things that will help you make money. The charts already know what Derek's about to find out the hard way.
Photo by Tyler Prahm on Unsplash
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