Inflation Surprise
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S&P 500 is trading still within a bullish flag that‘s missing appropriate resolution, and for all the positive shelter inflation comparisons with prior subdued months somewhat balanced out by natgas, I don‘t think core PCE would come in as hot as feared (not hotter than per expectations) as market reaction would ultimately reveal.
That though doesn‘t make the current situation overly clear as per my comments in our channel this European morning – this is the direction odds are favoring in my view:
Let‘s move right into the charts (all courtesy of www.stockcharts.com).
Gold, Silver, and Miners
Gold would react sensitively, and given the limited bashing so far, it‘s likely to swing higher after the data release, positively affecting silver, copper and equities.
Crude Oil
Crude oil is positioned similarly to gold, and that favors upswing resolution – and natgas which is helping to deliver lower inflation figure, is as well recovering, but don‘t look for miracles in this one.
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