The S&P is just a little off the all time highs after this news. A question looming in every investor's mind is whether or not the Fed took action too quickly. CPI obviously did not meet our expectations, but there are some things to consider.

CPI y/y did fall from last month, just not as much as we wanted it to (from 2.5% to 2.4%). Month-over-month stayed the same with Core unchanged as well. Core has been sticky all year, so any sort of rate cut seemed unnecessary, but everyone wanted it to relieve the labor market.
-Frank

The value play is still very much in tact according to the EdgeFinder. Although we are expecting less aggressive cuts going into the end of the year, blue chips are still in high demand. This is likely due to the overwhelming demand in dividend stocks in the past few weeks.

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Retail behavior is little changed since Monday: still short DOW, SPX. NASDAQ now mixed, gold mixed. Oil being the top bought asset could be bearish news for the price as it may be too early to suggest that a true reversal has come.

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SPX500 is getting bought by COT and heavily shorted by retail. Smart money may be piling more into stocks because there is not a better option than equities for the time being. As yields decline, there is not a lot of opportunity in the bond market going forward.

Gold Daily Chart:

Price action continues to look bullish, despite my concerns that fundamentally we may be nearing a top.

The reason I say that is because recent jobs data, economic reports (PMI) and CPI all contributed to a stronger US dollar, which I think could continue.

This recent continuation for gold to the upside was helped by the cooler print for PPI on Thursday, as well as election and middle east uncertainty.

I am neutral on gold for now. Watching it close. Any trades I take will be shared in our signals room. Come join us before the week starts! (Use TGVIP for a discount)

- Nick

With little news events this week in the US, sentiment from last NFP and inflation data could carry over to this week. Volatility may be lower than the previous weeks, but we do have key earnings to watch out for. Will still be looking to have some spreads on the market if I find an opportunity.
-Frank

Sentiment this week started off optimistic especially in the tech space as we look forward to earnings kick off. This week, however, there are a handful of financial earnings reports. Since we do not have any significant USD news coming up this week, all markets are likely to drift higher on any kind of solid earnings growth.
-Frank

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With a neutral reading on the EdgeFinder, gold still hovers between all time highs and the $2,600 level of support. With lower inflation data last week and possibly strong earnings growth this quarter, demand might shift away from gold and more into the stock market.

The metal still seems bullish in the long run due to more devaluing of the dollar, but this week might not result in much higher prices on gold. Especially if sentiment switches further from risk-off and tensions in the Middle East ease, a healthy pullback on gold seems probable.

-Frank

Another factor that could keep indices higher is if oil prices decline, although the EdgeFinder readings suggest that oil is still bullish. Good economic readings for oil to continue climbing may push prices, but there are fears of an oversupply in the amount of barrels in inventories.

Oil also gained from Middle East tensions and risk-off scares. So if this does not become a major global issue, prices may come back down to test the lows in the $60s. Lower oil prices are very important to maintaining lower inflation that the Fed has been battling for 3 years now. So getting higher prices in oil could result in higher CPI data, causing inflation fears to come back again.
-Frank

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Retail is slowly getting away from shorting anything in the global markets. USDCAD and SPX are the only short positions on our list today. Meanwhile, gold, NIKKEI, DAX, UJ, GU remain mixed. The top bought assets are indices and other metals. USD is majority short in the crowd.

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COT has something else to say about sentiment last week. Most indices except DOW are shorted by smart money. This could mean that the rally we are seeing today and the past few days last week are retail-led. Although higher stock prices seem probable in the last quarter of the year, we need to watch for euphoric trading in the short term which usually results in a pullback of some sort. Heavy buying of oil and treasuries is actually more of a risk-off move from institutions.

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Retail sales is one big USD event this week, although it will likely not have a tremendous impact on price action. Earnings may overshadow this report, but it is still important to look at this data. Expectations are to be higher than last month's report on a month-over-month basis.

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NASDAQ 4H chart:

The fed is on our side. Inflation is cooling. Company earnings are growing.

Don't fight the bull. He will win!

- Nick

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BTCUSD Daily:

Guys, is it happening?

- Nick

Gold is stuck in consolidation post geopolitical tensions and lower inflation data in the US. Although there is a strong bullish case for gold, there is a chance that price can eventually retrace down to the $2,600 and under towards the $2,550. The metal has been in a strong uptrend since June which has been respecting the relative levels of support and resistance between each trend line.

-Frank

With little news this week and earnings optimism, the stock market may continue to drift higher even though yesterday’s move was hardly a drift. Buying at all time highs is not advisable, but the market refuses to correct by any significant amount. This week is likely not going to be the week where prices pull back either. Trading the US indices should be done with caution since there is always more risk to the upside when prices are at all time highs.

-Frank