The S&P 500 popped 0.5% Thursday even though inflation came in at the highest level in modern history. But anyone who’s been to the grocery store knew this was coming, so this report didn’t catch anyone off guard.
Inflation is turning into one of those Goldilocks things. Too high and it would have threatened further fiscal and monetary stimulus. Too low and it shows economic stagnation. Instead, the economy threaded the needle between these extremes and investors cheered the “just right” news.
As has been the case all year, this remains a half-full market and most investors continue finding the positives in every headline. While this cannot last forever, the market’s mood doesn’t look like it will change anytime soon.
Cynics believe they’re smarter than everyone else, but those that want to make money have been following the market’s lead. Telling people to embrace a long-established rally sounds like the most brain-dead and uninteresting thing ever, but hey, if it works, who cares?
We are so far into this rally, it is getting hard for me to think of anything new and interesting to say that I haven’t already said. Lucky for you, what’s hard for me has been good for readers that stuck with this rally.
Everything is still on track for a run to 4,300 over the next week or two. From there, 4,400 is easily within reach.
Until the market gives me a reason not to, stick with what has been working.
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Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.