In the pre-market, stock index futures went bid and were ready for a rip your head off rally on "peak inflation" and a cooler than expected CPI report.
Bitcoin futures were down in the pre-market and seems to be a good leading indicator in recent market pricing and "smarter" than stock index futures and bonds (which were also being bid up before the report).
CPI was hotter than expected and the stock index futures dropped sharply.
We also notice a gap in the Micro Nasdaq futures as the market surged right before the report and when the CPI was hotter than expected, there was a visible gap down on the one minute chart of about 35 points.
We are not trading strategies in the pre-market for this very reason and we are flat in general while we wait for the right timing to start trading our automated trading strategies.
One phrase that stands out is "Don't Fight the Fed". The stock bulls continue to fight a Fed that is deemed no longer credible.
We continue to look for instability in the market as well as limit moves and flash crashes. It's a difficult market to trade and its more important to manage risk and not lose in this type of market. We could also be in a 40 year regime change. We have experienced a 40 year Bond bull market and low interest rates.
Here are the headlines:
Futures Lose Gains, Fall Sharply after CPI Data
Up 8.2% (September) Core
Up 6.6% (September)
CPI Ex-Food & Energy
Up 0.6% vs up 0.4% Expected