It's Been a Runaway Train Into Today's CPI Print

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The S&P and Nasdaq are currently like a runaway train! Last night, I was discussing the qualities of a good trader with someone, and I mentioned that it's about the ability to get knocked down and bounce back, turning trading mistakes into lessons. There's no one-size-fits-all approach to trading. Some stick to basic charts — like me — while others use 10 or 15 indicators simultaneously. If that works for them, great, but for me, adding too many layers on my chart just leads to confusion.

What I do know is that the S&P and NASDAQ continue to outperform. Every dip — whether it's 15 or 50 points — gets bought. Will that trend change today? I don't think so, but I must admit, with the ES and NQ up so much, some funds might sell on the good numbers. If inflation numbers rise, we could see a swift and sharp drop.

While the big show today is the CPI number, investors will switch their focus to results from JPMorgan Chase, Citigroup, and Wells Fargo due Friday. According to data from the Federal Deposit Insurance Corp, banks are sitting on around $517 billion in unrealized losses on their balance sheets, which according to regulators is unusually high for 2.5 years. The problem for the banks is they bought government bonds and mortgage-backed securities when rates were low and had tons of customers during the pandemic, but now that the bonds have fallen, the carrying value of the bonds has declined as yields have gone up. Will this be reflected in Friday's earnings? We shall see...