Dawn Report – June 10, 2022


It’s rare that the market comes down to one thing…

But that’s probably the story of this morning.

The Dow and NASDAQ composite both fell yesterday because of this morning’s Consumer Price Index report. Expectations are that it will show a blistering 0.7% increase – with everything going up.

Food, rent, and of course, gas. (Don’t think I need to remind you about that one).

But even if we’re all looking at the same thing we’re going to have countless interpretations.

The key is whether core inflation, which excludes food and energy, is going up. Now, I know that seems like B.S., as food and energy are, well, pretty important.

(Mr. X certainly thinks so, and he’s got a new column on it today.)

But the distinction matters. If core inflation is declining, than the Fed may not feel the need to drop the hammer with interest rate increases of more than 0.5%. That may give traders more confidence in growth stocks and tech.

However, if core inflation is higher than anticipated, you can’t blame this on domestic energy policies, Vladimir Putin, or OPEC. All the political arguments become irrelevant. The universal truth becomes that the market itself is fundamentally imbalanced and that’s why we’re getting inflation.

And that means the Fed is going to act with far more force than it’s shown so far… and it will probably be a good day for those shorting tech stocks.

Remember, trust the trading patterns. Trust the charts. Markets are about people and their very human reactions – all the math does is give us the best way to interpret them.

Let’s end the week with victory.

Keep moving,

 


In this week’s Hood Talk, Chris looks at the market through three time frames – the daily, monthly, and weekly charts.

This isn’t just guesswork, but an analysis using tools that hedge funds are willing to pay millions of dollars to use.

 

Your Options Coach Chris Hood will show you how you can play the bulls and the bears at the same time and win.

WORD ON THE STREET 

Gas Over $5, Inflation Report Hitting NOW, Cathie Goes Long on RBLX

  • Buying The Dip – Tech stocks have been getting hammered with Roblox (RBLX) one of the main causalities. It’s down about 67% over the past year. Nontheless ARKK’s Cathie Wood just bought about $2.3 million worth of shares in the gaming company. Over the next few years, we’ll see if Cathie Wood will go down as one of the greatest investors of all time… or someone who just got lucky one year and has been wrong ever since.

  • Inflation: It’s All Relative – This morning’s Consumer Price Index report for May shows inflation is up – that’s a given. The real question is the way the Fed will interpret it. If Federal Reserve Chairman Jerome Powell sees it as a reason for extreme interest rate increases, that could spell doom for tech and growth stocks. However, if inflation is being driven by high energy prices, that’s not something the Fed can really meddle with in terms of interest rates. Story of the market today – the report is less important than what the Fed does in response.

“Now I am become Death, the destroyer of worlds.” – Jerome Powell, probably
  • Gas Prices Hit $5.00 – With prices topping $6.40 in California and hitting about $5.00 for regular-grade gasoline nationwide, energy is driving inflation beyond the Fed’s ability to control it. Some are already expecting $10 this year. (In this situation, you want an energy expert on your side. Don’t miss Dr. Kent Moors’s latest message here.

  • Disney Drama – CEO Bob Chapek’s tenure at Disney (DIS) has been rocky, with the company being forced into several political controversies and even becoming a target of the governor of Florida. However, the board still has the CEO’s back, with the board’s chair saying that the CEO has their “support and confidence.” He’d better, as he just executed a shocking move by abruptly firing Peter Rice, the company’s most senior television content executive. He was once seen as a possible CEO candidate himself.

 


This “tool” earned over $400k in 12 months.
Video uncovers the winning tactics that handed one trader an average $7,300 in profit every week using just shy of $12,000 in capital.

HOT SPOTS: What’s Going on in Geopolitics

  • DPR Court Sentences Foreign Fighters To Death – Two British men who fought for Ukraine, as well as a Moroccan comrade, have all been sentenced to death by a court in the Donetsk People’s Republic. The country, widely seen as simply a Russian puppet, said the men tried to “forcibly seize power in the DPR for a reward.” Great Britain slammed the “sham ruling” by a country it doesn’t recognize, and said it was “hugely concerned.”

  • Alliance Of Iron  I love it when you get these kinds of bombastic statements. “China and Cambodia have become ironclad brothers,” China’s ambassador to Cambodia said at a ceremony. China is helping Cambodia expand and renovate its largest naval base. The United States opposes the move and said Cambodia is withholding information about what’s really going on.

  • Ukraine’s Final Battle? – Ukrainian President Volodymyr Zelenskyy said that the fate of the entire Donbas region is being “decided” in the fight over Severodonetsk. Russian troops control most of the city but are reportedly suffering heavy casualties. Ukraine continues to hold the outskirts, turning what once looked like a swift Russian victory into a slow and costly advance.

CUTTING EDGE: Whats Happening In Tech

  • AMD Promises Focus On AI – At analysts’ day, Advanced Micro Devices Inc. told the world it is looking to conquer the Artificial Intelligence market. “This is the single highest growth opportunity for us,” CEO Lisa Su told analysts, “the largest growth opportunity for us over the next few years.”

  • And So It Begins… – This could be some big news for biotech and pharmaceutical companies. Spain will begin vaccinating close contacts of the more than 242 people who have been found to have contracted monkeypox. There are now more than 1,200 cases worldwide.

  • Tesla Coming Under Increased Federal Scrutiny – The National Highway Traffic Safety Administration is upgrading its investigation into Tesla (TSLA). The shift to an “Engineering Analysis” level probe into the company’s Autopilot system could potentially lead to a recall in the worst case.


It’s All Fun And Games Until The Car Itself Decides The Trip Is OVER

FOR YOUR CONSIDERATION

“The premise global leaders have taken for granted since the end of the Cold War is that nations will act based on rational economic motives and the pursuit of efficiency. Yet nations, no less than people, are driven by pride, identity, and ambition. Those things can be irrational, but they are part of the human experience, even in statecraft.”

Food prices are up – something you’ve noticed every time you go to the grocery store. If something is still the same price… you might find that the packaging is suddenly a little bit smaller.

This inconvenience for us could spell doom for millions elsewhere.

Mr. X discusses the prospects of food prices and possible supply shortfalls. As investors, how can we play it?


The information in this email is intended for informational purposes only and does not guarantee specific results as there is a high degree of risk involved with trading. Also, our traders are real traders and may have financial interests in the companies discussed. Please see our Terms and Conditions for more information