WMT - New Hotter Inflation Data – Momo Buys The Dip Fed Blunder Shows Up In Roaring Meme Stocks | Benzinga
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Hotter Inflation Data
Please click here for an enlarged chart of SPDR S&P 500 ETF Trust (ARCA:SPY) which represents the benchmark stock market index S&P 500 (SPX).
Note the following:
- The chart shows the stock market is in the resistance zone.
- As is their pattern, the momo crowd was buying ahead of the release of the Producer Price Index (PPI) on hope strategy.
- The momo crowd’s hopes were dashed when PPI data came much hotter than expected. Here are the details:
- Headline PPI came at 0.5% vs. 0.3% consensus.
- Core PPI came at 0.5% vs. 0.2% consensus.
- The chart shows the stock market first dipped on bad inflation data, but as of this writing in the premarket, the momo crowd is aggressively buying the dip.
- Prudent investors, in The Arora Report analysis, would want to wait to see Consumer Price Index (CPI) data tomorrow before taking any action. CPI will be released tomorrow at 8:30am ET.
- The Arora Report previously shared that the Fed’s second blunder has loosened financial conditions way beyond where they should be based on the economic data.
- The Fed’s blunder is now showing up in meme stocks roaring back. Earlier this morning, GameStop Corp (NYSE: GME) was up 163% in the premarket on top of 74% gain yesterday.
- The meme crowd ran up AMC Entertainment Holdings Inc (NYSE: AMC) 156% this morning, trading as high as $13.30 in the premarket. AMC took advantage of the meme crowd to raise about $250M of new capital by selling shares at $3.45. When the company is selling shares at $3.45, why would the meme crowd buy the same shares at $13.30? The answer is the meme crowd is not doing any analysis other than becoming a meme to cause a short squeeze.
- The last meme craze ended in tears for the meme crowd with big losses. As full disclosure, The Arora Report gave a number of successful, short term signals on meme stocks, taking advantage of previous crazes. If the ...