Republic Risk: Higher for Longer...

CPI came in higher than expected, and now we begin the inflation dance.

Equity Index Strength Is YELLOW on the S&P 500 and YELLOW on the Russell 2000.

Each morning, we assess the full flows of the market by measuring statistical and technical metrics to determine broader market sentiment and the Equity Strength trend. When these readings turn red, we focus on cash, build trades around positive sectors, or take inverse positions against indices. When it is positive, we focus on short-squeeze stocks, companies with improving fundamentals, and trading/investing around the actions of corporate insiders.

Volume should return to the market today after the CPI report this morning, which came in hotter than expected. The CPI ticked up 0.3% for December, pushing the annualized rate to 3.4%. As I noted yesterday, this wasn’t unexpected - we’d seen weakness in the utility sector.

It’s rather impressive that these funds get it right so often.

There could be some rather wild moves today, so if you must trade, use the Deviation Band strategy we’ve advocated. On the S&P 50…