Cool Inflation Data Masks a Market Pinned in Place

Andrew@CANSLIM RESEARCH

The Inflation Report Fuels a Cautious Rally

Softer inflation data is the main driver for markets right now. July headline CPI rose just 0.1% month over month, with the annual rate easing to 3.4%. Core CPI fell to 2.5% year over year, its lowest level since March 2021. Producer prices also came in flat for July, missing forecasts for a gain. This confirms that price pressure is easing, not reaccelerating. The market sees this as enough to keep the Federal Reserve on hold. That is supportive for risk assets. A weaker labor backdrop adds to the case that policy does not need to get tighter. The data is not clean enough for the Fed to declare victory, but it is a meaningful step toward the 2% target.

The Online Crowd Turns Skepticism Into a Buy Signal

Global social sentiment is bullish, but extremely irritated. The community jokes about "cooked" inflation data, using chef and Michelin star metaphors. They note June was revised upward again, fueling distrust. However, the real turning point is their conclusion. They did not turn bearish because they doubted the data. Instead, their position became, "if the numbers are fake, then buy." One popular comment sums it up: "They can cook the books longer than I can stay solvent." The market barely reacted after the release. SPY was at 774.05 premarket, stuck in the 772–775 range for a week. QQQ was up 0.94%. The crowd predicted this sideways pin accurately, but they were systematically wrong on individual stocks.

Earnings Reactions Split the Market's Mood

Individual stocks are the real emotional flashpoints. ONDS reported record Q2 revenue of $83.8 million and a pro forma backlog of $757 million. Full-year guidance was raised above $525 million. Yet the adjusted EBITDA loss widened, and GAAP results missed. The stock plunged from 9.9 to 8.8 premarket. A large group of bulls expecting a "+30% after earnings" became bagholders. CSCO beat on both top and bottom lines, with Q4 EPS of $1.22 and revenue of $17.3 billion. Guidance was strong, but the stock reversed lower after hours, down about 4.3%. The crowd thought CSCO was "unfairly punished," but selling continued for two sessions. Good numbers are not enough if the technical pattern breaks.

The AI Financing Narrative Escalates to New Extremes

The AI financing story is heating up again. Reports say Anthropic could go public as early as October, with investors expecting a $2 trillion valuation. Some see $3 trillion. Annualized revenue was $4.7 billion in May, with expectations of $10–12 billion by year-end. Under this narrative, NBIS traded near $250 premarket. A noted short position initiated at approximately $212 on August 6 remains underwater. Long-end rates are a concern, with the 30-year Treasury yield at 5.24%. A 30-year auction is scheduled today. The war with Iran remains at a stalemate. Despite these risks, the crowd treats VIX calls near 14 as a "cheap hedge." Greed is high at roughly 72/100, but expressed defensively. Bulls do not dare discuss valuations, saying only, "you can't short this market."

The Featured Chart Reveals the Weakest Link

The featured chart is SNDK, which currently shows the weakest technical pattern. SanDisk Investor Day begins at 9:00 ET, representing the biggest variable for the memory supply chain. The company previously guided for a gross margin of 83–85% next quarter. It said the NAND market would exceed $30 billion in 2026 and $50 billion in 2027. SNDK closed Wednesday at $1344, while MU traded around $913 premarket. The weak technical setup suggests the market is not fully buying the bullish narrative. This is a key divergence. While the inflation data supports a pause, the price action in SNDK warns that leadership is fragile. A weak pattern in a high-profile name often signals broader market vulnerability.

The Pinned Tape Demands Patience and Precision

The market is stuck in a dead zone between 772 and 774 on SPY. Theta is eating away at options on both sides every day. The crowd is bullish but irritated. They believe the data is cooked, yet they buy anyway. This is capitulation-style bullishness. The inflation picture is better, but not clean enough to argue the Fed is ready to declare victory. Energy prices fell in July but remain elevated year over year. The 30-year yield at 5.24% is a lingering threat. For growth investors, the lesson is clear. Do not chase the index. Focus on individual technical patterns. SNDK is the weakest link. ONDS and CSCO show that strong fundamentals do not protect against poor price action. The market is telling you to be selective. Wait for volume confirmation and proper bases. The online crowd is buying the narrative, but the tape is not confirming. Patience is your edge.

Sources: market news brief & global social sentiment data. Updated 2026-08-13 22:00 HKT. For educational purposes only — not investment advice.