Why Is the Market Dumping Today?
Many of you may not fully understand, so I will simplify it:
Higher-than-expected PPI = a direct signal indicating that inflationary pressures are still present.
Today's PPI will reflect in the next CPI, which is likely to be 'hot' as well.
When inflation is high, the FED is unlikely to lower interest rates (according to the current stance).
This means: the expectation for the FED to cut interest rates in September — which the market had strongly bet on — has now become uncertain.
Although the percentage of prominent investors predicting the FED will cut rates remains at 85%, the market wants to react negatively, then undergo extreme FOMO, then crash, then get bored before actually experiencing the real extreme FOMO.
(Anyone who understands this will avoid a major massacre that is coming, but not just yet)
The dump you see today is the market re-evaluating this uncertainty.
What’s Next?
As I have analyzed earlier:
From now until the end of August, there will continue to be unpredictable fluctuations, with prices moving sideways within a wide range.
A major breakout is likely to occur at the end of September, when the macro picture becomes clearer.
Strategy
Gradually accumulate during dips
Be patient, maintain your faith
Wait to enjoy the big wave afterwards
In the short term, macro factors always lead the market.
Today's dump is not random — it is a logical response to high PPI data that undermines the expectation of a rate cut in September.
Patience is the key to winning; remember to only hold spot and futures at 1-3% of your account.
Thanks!