Speculative trading has cooled off after some quick reversals Wednesday morning. Breadth is still slightly positive, and there are over 675 stocks hitting new highs today, but traders are citing Thursdays CPI announcement as a reason for some caution. Bonds opened strongly this morning but have been slowly fading in front of CPI.
A hot CPI report would not be a big surprise, but we are likely going to hear the word "transitory" once again to explain away any short-term spikes. While the market has shrugged off some of its recent inflation worries, the anecdotal evidence of higher prices is so pervasive that it is tough to totally dismiss the worry.
I've been very actively trading as I try to protect some sizable and fast profits. I'm looking for entries on pullbacks, although we may need to get past the economic news before trading heats up.
One group on my radar right now is the bitcoin-related names. Bitcoin is finally seeing a better bounce, and that is pushing up stocks like Riot Blockchain (RIOT) , marathon Digital Holdings (MARA) , and Coinbase (COIN) . I'm adding to a position in Mogo, Inc. (MOGO) , which is a Canadian fintech play that has a majority ownership in Coinsquare, which is the Canadian equivalent of Coinbase.
The aggressive trading that has occurred the last few days has been very entertaining, but it is probably good that it did not become too heated, too fast. We don't need a situation similar to what happened in February when all the speculative and growth names collapsed in a matter of weeks.
I expect trading to pick up again after the CPI news, which is due at 8.30 a.m. ET Thursday morning, along with weekly unemployment claims.