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February 14, 2018 | Markets Go Bonkers for a New York Minute

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

The markets went bonkers Wednesday morning when it was announced before the opening that the Consumer Price Index had risen more than the usual suspects had estimated. (Who are those guys, anyway?) S&P futures dove nearly 50 points in mere minutes, the E-mini Dow shed an instant 500 points, Treasury paper plunged even more steeply than usual, and gold hit a $25 air pocket.  Then, moments later, everything but the Treasury paper reversed — with a vengeance. Stocks, crude oil and bullion in particular embarked on steep rallies that continued for the remainder of the session.  As for the news, the actual increase in the CPI amounted to 0.5 percent over the previous month, driven in large part by a jump in apparel prices. If ever there were a headline for traders to fade, this was it. Those who did reaped a bonanza when the markets trampolined off their own, egregious misjudgment. If Wall Street pretends to care about inflation in the future, we should remember this day before we buy into the phony narrative about serious inflation being right around the corner. It ain’t gonna happen.

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February 14th, 2018

Posted In: Rick's Picks

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