Bond Yields Continue to Fall Behind Tame PPI. CPI is Next. Plus Two Conditional CPI Triggered Trades.

A Bullish CPI could spur this market higher.

The better than expected reading of the Producer Price Index (PPI – 0.1 vs. 0.2 expected rise) has pushed the U.S. Ten Year Note Yield (TNX) lower, which is a good thing, unless it’s reversed by a worse than expected CPI number, to be released tomorrow.

As I’ve noted lately, the recent rebound in TNX was well within expectations while the important number to watch is 4%.  A move above 4% would likely take the wind out of the still nascent rebound in stocks.

For its part, the most reliable indicator of the past several years, the New York Stock Exchange Advance Decline line (NYAD) remains within reach of its recent highs.  It’s difficult to imagine a bear market with NYAD this close to a new high.  Thus, until proven otherwise, the stock market gets the benefit of the doubt.

That said, what’s most important is being in what’s working and staying patient.  In this issue, I am adding a new conditional trade while reviewing several recent, “if this happens, do this (IFHDT)” trades.