Daily Alert – Wednesday 12th January 2022: Powell boosts equities, CPI later

Mark NugentDaily Alert, Jan 2022

Daily Alert – Wednesday 12th January 2022: Powell boosts equities, CPI later

Good morning.

Fed Chair Powell, at his renomination hearing, managed to assure the senate that inflation can be tamed without damaging the economy. Equity indices climbed across the globe. However, sentiment was indecisive. What was preventing a positive reading was US bond yields which were slightly, ever so slightly, down.

I entered Nasdaq long on a pending order. I doubled my stop loss and risk to allow for volatility. This approach worked very well in the last quarter of 2021. It saved me yesterday as, after the trade was triggered, there was a temporary move down before the bullish move resumed. I also entered Japan225 long at yesterday’s close. Both trades are doing fine so far with stops at breakeven.

Today sees US Core CPI at 130pm GMT which is expected to hit 5.4% year-on-year. A “beat” on this figure, i.e. a number higher than 5.4%, could bring my equity trades to a screeching halt.

We’ll be back tomorrow.

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