Stocks Rally After CPI Higher Than Expected

Two of the concepts that I have learned from 31 years of investment experience are that what the futures are doing before the open does NOT dictate what the market will do that day and economic announcements seldom alter the intermediate term trend of the market. Today proves out these two concepts once again. The futures were down this morning in part due to the higher than expected CPI report. The market then opened lower and after about 30 minutes of trading rose to Wednesday's close and the moved higher from there. Why don't futures in the pre-market show us what the market will do that day? Quite simply, the futures market is NOT a crystal ball. We know that no one has a crystal ball, so isn't it amazing that some people believe that pre-market trading is a pre-look into later that day? Well it is not and today's price action proves the point once again. Why don't economic announcements typically alter the intermediate term trend of the market? Institutional traders already have a very reliable expectation of what the economic factors are and they have generally made decisions based on their analysis and not the news itself. At times they may fine tune their positions after learning the news but seldom will they totally make or reverse a decision based on the news. Nasdaq 100 Stocks Moving Up: HANS, SNDK, NVDA, LAMR, FMCN, AMLN, INFY, UAUA.. Stocks Moving Up: DRYS, ONXX, GET, EXM, NDAQ, LDK WRC, COH, KMT, PNRA Futures are down in pre-market trading. The CPI was up0.8% in July, higher than the expected 0.6%. This is an annualized 5.6% rate. Core inflation was 0.3% for July. Watch key short-term support and resistance levels like yesterday's highs and lows to determine if the two-day pull back has more to go or is ready to reverse back in the direction of the bigger trend. Review yesterday's Stock Commentary for stocks to watch on Thursday. Will the counter-trend moves of the coal, energy, steel and ag-related stocks continue or will they fizzle? It will be an interesting day...Stay tuned!