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Why Inflation Worries Don’t Move The Market Anymore

By Jani ZiedinsStock MarketsJun 04, 2021 01:43AM ET
www.investing.com/analysis/why-inflation-worries-dont-move-the-market-anymore-200584170
Why Inflation Worries Don’t Move The Market Anymore
By Jani Ziedins   |  Jun 04, 2021 01:43AM ET
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Thursday was a bumpy ride for the S&P 500 with the index crashing through 4,200 support at the open and shedding nearly 1%. But as bad as the day started, the selling stalled thirty minutes later and it was all uphill from there.

Netflix Inc Daily Chart
Netflix Inc Daily Chart

Headlines again remain benign. The market was initially spooked by unexpectedly low weekly unemployment claims and that stoked inflation worries. But as I’ve been saying for a while, that story has already played out. Most of the people who fear inflation are long gone and were replaced by dip buyers who don’t fear any such thing.

That said, I still think the odds on favorite for killing this bull market is high inflation. But we need more than just early hints of potential inflationary pressures, we need to see the real thing. The boy has cried wolf one too many times and no one is listening to him anymore. Traders need to see the Fed lose control of inflation, not this hypothetical crap. Until then, confident owners will simply ignore the headlines and keep holding.

As much as bears have tried to break this bull market, they cannot get the job done. A market that refuses to go down will eventually go up.

As much as I like the FAANG stocks,Netflix (NASDAQ:NFLX) needs to be taken behind the woodshed. I’m not giving up on this company over the long-term, but the stock’s price action is awful and failing to hold $500 support suggests lower prices are ahead. The latest bounce is dead and savvy longs are already out. And not only that, aggressive traders can short this weakness with a stop just above $500.

The other big news is the silliness continues in GameStop (NYSE:GME) and AMC (NYSE:AMC). As badly as this will end for most people, stupid still has plenty of room to get even stupider. Early breakout buyers can keep holding for higher prices. But if you missed this trade, it’s too late because there is no way to protect your risk at these levels. Move on and look for something else.

Why Inflation Worries Don’t Move The Market Anymore
 

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Why Inflation Worries Don’t Move The Market Anymore

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Comments (3)
Jouni Matero
Jouni Jun 04, 2021 6:47AM ET
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Now u guys are removing comments too, well done. Jobs sata doesn't affect rising bubble at all. Good or bad data, bubble goes up.
Michael Michaels
ManBullPig Jun 04, 2021 2:00AM ET
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Spot on
Hichem Trabelsi
Hichem Jun 04, 2021 1:59AM ET
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The market is not going down, but neither up .. and it will keep this "holding" pattern unless the "big investors" (real markets controllers) will have more confidence in promised economic growth through official data (not only the inflation is worrying them) in order to decide how and in what to invest or not..
 
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