Market Report Inflation, Supply Chain pressure Markets

Market Report Inflation, Supply Chain pressure Markets

By

Todd Horwitz Chief Strategist BubbaTrading.com

Be Prepared not Surprised.

The market meltdown has begun, no longer can they ignore inflation, supply chain disruptions and an administration that refuses to drill for oil. Chair Powell has been nowhere to be seen putting rate hikes into question. This is one ugly period that could drive these markets down hard.

Last week’s CPI came out around 8% which is misleading considering it puts very little emphasis on what American families spend most of their money on, food and energy. With gas at the pumps reaching as high as 8.00 per gallon in parts of the country energy is a huge cost. True inflation is probably in the 20% range.

Is the great reset under way, one must wonder why we are not producing our own oil? Considering that there is a 300-year supply based on current usage and no green energy program will be ready for 10 years. The oil problems directly impact the supply chain putting more pressure on equities.

Last weeks option trading remained consistent with the market action. Call buyers lead like every other week but could be creating synthetic puts while Put buyers and call sellers followed closely behind. Everything points to a hard sell off, however a rip your face off rally could show at any minute shaking out the weak shorts.

The Bulls were buying VXX (bearish trade), NVDA, AMD, QQQ and TSLA while the bears focused in on SPY, HYMC, FB, UAL, and WYNN. The set up is in place for an extended bear market but we must remember bear markets have vicious rallies that should be sold.

Remember, we can’t predict what’s next, but the price action will give indications and guide us in the right direction. All signs are starting to point lower however flexibility is the key to trading successfully.

As traders and investors, we have one thing to remember, follow the trend of the market. Be patient disciplined and leave your emotions out. The most important thing to remember is money management and self-control.

Todd “Bubba” Horwitz

BubbaTrading.com