The Inflation Trap Nobody's Talking About
In a Nutshell
CPI report worse than expected at 3.8% (highest since May 2023), driven by surging oil and gas prices up 65% in six months, outpacing wage growth and eroding consumer purchasing power—markets dipped (QQQ -1.1%) but remain irrationally optimistic, ignoring inflation risks like potential rate hikes. Historical 2022's 9.1% inflation led to 12 months of sell-offs; current pullback offers day trades but demands caution—no leverage, small position sizes, larger time frames, and no aggressive shorts amid reversals. Join LPP live trading for calculated plays during uncertainty to protect capital and end the year green.
These notes were generated by AI and may contain inaccuracies.
NASDAQ market QQQ is currently down 1.1% after the CPI report was released, which came out worse than expected. Some claimed the market does not care about the inflation report and would only go higher, but the market will always care about the inflation rate eventually, despite temporary irrationality.
Think back to 2022 when inflation reached 9.1%, a 40-year high. The Federal Reserve raised interest rates to slow the economy. Markets sold off for nearly 12 consecutive months. Prolonging or ignoring inflation leads to more negative market impact due to recovery needs.
In today's live trading session with the LPP team, markets are selling off, but inflation on both core CPI and overall CPI is going up, which is not ideal for the Federal Reserve. Markets remain irrational; e.g., Trump tweets manipulate sentiment over the past 6-7 weeks. This is a nice pullback in the bigger picture—no crash, no real sentiment change, not enough fear. Room for quick day trades, but not a huge home run.
Some stocks like SanDisk were down 8-9% at one point. Most stocks are barely selling off from open, even overvalued ones. Be very careful shorting the market now. The market is red, but showed buying pressure at open, pushing to highs of 710, forming new lows but ripping back up, forming lower highs. Be careful with position size and exposure, especially beginners.
Look at larger time frames for perspective. If markets will sell off, there's much downside potential—no need to rush or go all in early. Avoid going all in then getting upset by reversals like Trump tweets. Calculated trades are better than irrational trades, for both short and long sides.
During uncertain times, regardless of bull or bear view: do not use leverage and do not be aggressive while markets decide direction. At a critical point—don't jump the gun.
CPI inflation rises to 3.8%, highest since May 2023, due to surging oil prices. In last 6 months, US gas prices rose 65%. For first time in 3 years, US inflation outpaces US wage growth—consumers losing purchasing power. Highest inflation rates in past month-over-month shown.
Inflation is going up, but markets not fully digesting it—still irrational, focused more on Middle East updates. As inflation creeps higher, harder to fix like in 2022. Cutting rates is bullish but inflationary; rising inflation lowers rate cut likelihood, raises rate hike possibility, which is bearish. Far from that now. Watching for more fear from inflation or Middle East escalation.
Tune into daily live trading sessions. Click second link in description to learn about LPP team. Members joined in 2018, paid once, still watch live trades. Focus on protecting beginners during uncertain times. Let's end the year on a green note.
Keep Ricky Gutierrez in your library
Save the videos and channels worth coming back to, and find them again in one place.
