10/11/22 Peak Inflation & The Most Expensive Tick


Markets completed another down Friday, down Monday yesterday. 

That’s the 14th occurrence of 2022. Selling on either side of the weekend is a staple of bear markets.

Compared to Friday, Monday’s losses were moderate…

  • Dow Jones -0.3%
  • Nasdaq -1.0%
  • S&P 500 -0.7%
  • Russell 2000 -0.6%

Sector Round-Up

tiles spell out "stay safe"
Photo by Sincerely Media on Unsplash

It wasn’t all a loss, 4 of 11 sectors ended Monday higher. The “safer” sectors posted light gains…

  • Consumer Staples (XLP) +0.4%
  • Industrials (XLI) +0.4%
  • Materials (XLB) +0.2%
  • Utilities (XLU) +.02%

The day’s biggest losers…

  • Technology (XLK) -1.7%
  • Energy (XLE) -2.1%

The Most Expensive Tick in the Market

photo of $100 bills
Photo by John Guccione from Pexels

As we enter into the best six months of the year and the sweet spot of the election cycle, we wanted to offer a simple reminder…

  • The first and last tick of a trend is always the most expensive tick of the trend.

Our approach offers some general timing, but we’re not trying to catch the exact top or bottom. Instead, our goal is to catch as much of the trend as possible.


Where is the panic?

As today’s chart shows the VIX is climbing, it’s closing in on 52-week highs. But it’s moving at a very slow pace.

VIX chart
VIX Daily Candles – Chart via thinkorswim

Compare this increase in volatility to the previous spikes, and it doesn’t match up.

Typically the VIX moves very quickly. Right now the fear gauge isn’t showing panic. It’s showing controlled selling.

If the market can enter a true panic and the VIX makes new 52-week highs, the market will likely finally reach the bottom.

Our other signals


Today & tomorrow the market will likely remain on edge.

All eyes are on the CPI inflation data, which is due out at 8:30 AM on Thursday.

Inflation prediction chart

Ahead of the next release, we wanted to show you the J.P. Morgan (JPM) model from June. 

Their model shows:

  • Inflation peaking in June
  • Staying relatively high for a few months
  • Then eventually falling dramatically.

So far this model has been spot on.

Thursday’s reading will be the ultimate test.

If inflation reaches a new high for the year all bets are off.


*Low Float
^Open Position*BEAT on watch
*^RELLsupport at $18
FNGR support at $6, resistance at $8
HROWresistance at $13, support at $11
IMUX on watch
ETNB resistance at $7.50
IMVT support at $9, resistance at $10
EVTL support at $10
DCPH support at $17
RVNC support at $29
XFOR on watch
VIST support at $10.50
PRVB on watch
ADEA on watch
HLIT support at $13
ARDX support at $1.40
CANO support at $9

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