The CPI numbers were higher than expected, but many market participants were expecting far worse. For now, the concerns about runaway inflation have been set aside, and market players are looking to put more cash to work.
Breadth is running around 46 to 29 positive, but the pockets of momentum have slowed. Meme trading is mixed, and the small-cap strength that was triggered by the Russell reconstitution has cooled. Growth stocks held by ARK Innovation ETF (ARKK) have been basing for several days right below significant overhead resistance at the 50 and 200 dma.
It is not bad action, but speculative trading has lost energy, and there is some rotation back into big-cap value names. The Russell 2000 is lagging today after a few days of outperformance.
I'm nibbling at a few trades but not doing too much right now. One theme I'm watching very closely is SPACs that have either already closed deals or are very close to closing. Once the arbitrage of the Net Asset Value no longer exists, I expect some of the quality names to trade much better. One example is CM Life Sciences (CMLF) which is trying to close this month, and another is Osprey Technology Acquisition (SFTW) .
The indices are rolling over as I write. We have had some weak finishes lately, and that may put the buyers back on the sidelines.