1 Long and 1 Short Stock to Trade the Latest Hot Inflation Data

by | Oct 13, 2021 | Market Updates

Volatility is likely to continue with Wednesday’s release of the Federal Open Market Committee minutes, the Producer Price Index on Thursday and the Retail Sales Report on Friday — and more in Wednesday’s stock market recap. 

Stock Market Recap

In Wednesday’s stock market recap, stocks are mixed as investors digest hot inflation data and await more by the end of the week. 

The Consumer Price Index rose 5.4% versus the expected 5.3% on a year-over-year basis. Consumer prices are expected to move even higher as energy costs rise and supply chain bottlenecks continue. Keep your eye on the bond market and how it responds to this inflation news.

The put/call ratio and momentum levels show that stocks are likely to move higher or consolidate at current levels overall. In the short term however, we are likely to see high volatility due to more Fed data and earnings, which are now in full swing with companies reporting third-quarter results. 

I picked out a freight stock to go long on and a lithium stock to short and trade this choppy environment. 

Roger’s Radar: One Long, One Short Stock to Trade Volatility

Atlas Air Worldwide Holdings, Inc. (Nasdaq: AAWW) is one of my favorite stocks. It has a market capitalization of $2 billion and is in the Russell 2000. We’ve seen an influx into small-caps as traders have gotten out of interest-rate-sensitive stocks. Freight companies are positioned to benefit from supply chain bottlenecks. 

The short stock I’ve identified is a lithium exploration stage company. The lithium industry hasn’t done well recently, and this stock has been on a downtrend. Make sure to check out the video to get this short lithium opportunity… and both trades’ corresponding options! 

In this video, you’ll discover why CPI data is vital right now… why the put/call ratio keeps bottoming out… how volatility is shaping trading action… an update on small- vs. large-cap momentum… and actionable long and short trades. 

 

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WRITTEN BY<br>Roger Scott

WRITTEN BY
Roger Scott

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