Stock futures fell Monday because people who don't know what stocks are worth decided to wait for a number before pretending they know what stocks are worth.
The inflation data comes out this week. The Federal Reserve watches it closely. Retail traders watch the Federal Reserve closely. The Federal Reserve does not watch retail traders at all.
Somewhere in New Jersey a guy named Derek just learned that Iran exists and now he's convinced it affects his three shares of Tesla. It does not. Iran has never heard of Derek. The Fed has never heard of Derek. Tesla's stock price has never heard of Derek but it moved anyway because someone else's algorithm sneezed.
The Iran deal progressed or didn't progress depending on which diplomat you ask and which hour you ask them. Progress is a word that means nothing when applied to negotiations but everything when applied to futures contracts at 6:47 AM Eastern. Makes perfect sense.
Wall Street awaited the inflation reading the way a dog awaits a treat. Panting. Focused. Completely unaware that the treat was determined by a bureaucratic process three months ago and the anticipation is the entire point of the exercise.
The technical setup remains unchanged. Support held where support holds until it doesn't. Resistance resisted where resistance resists until it doesn't. The 50-day moving average moved because that's what averages do when you add new days to them.
Derek already sold his Tesla shares at a loss to buy Iran futures, which do not exist as a retail product. His broker is screening his calls.
The inflation data will print high or low or exactly as expected. Futures will gap up or down or sideways. Analysts will explain why the move made sense in retrospect. Derek will learn that geopolitical risk cannot be hedged with a Robinhood account and a Reddit thread. The Fed will continue not caring about any of this.
Check back Thursday when investors weigh employment data while awaiting clarity on trade negotiations they also cannot price.
Photo by sina drakhshani on Unsplash
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