3/15/23 Stubborn Inflation, Dead Cats


Markets surged higher when the latest inflation reading, the CPI, revealed inflation remains high. By the numbers…

  • Month-over-month increase +0.4%
  • Year-over-year increase +6.0%

Core inflation, which excludes energy and food, rose even more, +0.5% month over month.

Chart by Bureau of Labor Statics

Food prices increased more than any other major category.

Bouncing from oversold conditions, the markets surged higher. Major indexes jumped as much as 3% in early trading. 

By the close, the indexes settle higher but below their daily highs…

  • Dow Jones +1.1%
  • Nasdaq +2.1%
  • S&P 500 +1.6%
  • Russell 2000 +1.9%

Sector Round Up

All 11 sectors ended Tuesday in the green.

At the top…

  • Communications (XLC) +2.8%
  • Technology (XLK) +2.3%
  • Financials (XLF) +2.0%

At the bottom…

  • Energy (XLE) +1.0%
  • Consumer Staples (XLP) +1.0%
  • Healthcare (XLV) +0.9%

Begging for Bitcoin

The price of a single Bitcoin^ surged to its highest level since June 2022.

Bitcoin Daily Candles – via Barchart

This morning it’s holding near $25,000 per token. Despite the overhead resistance, the chart appears to be pointing higher.

We continue to accumulate Bitcoin weekly.


Volatility favors the bears.

The VIX surged above the critical level of 22.50 last week. On Tuesday, it bounced off of that level…

VIX Daily Candles – Chart by thinkorswim

Our take … Yesterday’s surge was more about relieving oversold conditions than market optimism.

The bounce is known as a “dead cat bounce.” Others call it a bull trap. We believe the rally will be short-lived.

Our current outlook is bearish. We sold into yesterday’s rally.


Another round of inflation data drops this morning.

At 8:30, the Producers Price Index (PPI) will be the main driver of volatility in the market.

Today is also a notable anniversary…

On this day in 1933, the S&P 500 gained 16.6%–Its largest single-day gain ever.


*Low Float
^Open Position

*BLPH resistance at $7, support at $6
*AMAM support at $8
PTGX support at $24, resistance at $26
DKS support at $140
DTC on watch
SQSP support at $25
^INDI support at $10
IOT support at $18
RELY support at $15
ARDX support at $3.50
GOTU support at $4.50
BGCP support at $4.75

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