No One Is Betting on a Major Market Turn Anytime Soon

The September CPI report came in hotter than expected, with the core number running at an annual rate that is the highest in 40 years. The bulls keep hoping that inflation is peaking but the problem now is that there is fear that it is becoming entrenched and will stay elevated for some time.

Sticky inflation is the Fed's biggest fear, and it ensures that they will continue to hike interest rates aggressively. There is now a growing likelihood that the Fed will hike rates by 0.75% at its meeting in both November and December. Bonds are hitting new lows as interest rates rise and the dollar continues its parabolic move to the upside.

Despite the bad news, traders were looking to buy the gap-down open. It is a classic technical setup that worked well because there was no big runup into the news over the last couple of days. The question now is how quickly will the dip buyers sell into the strength.

At this juncture, no one is betting on a major market turn. The bear market is gaining traction on the negative news flow and the inability to fully discount the tremendous uncertainty that still exists.

We are heading into earnings season, and we have to wonder if current estimates and guidance have come down enough to reflect the economic chaos that has been building.

I nibbled a few names at the open this morning, including Aehr Test Systems (AEHR) , The Beauty Health Co (SKIN) , and AdvisorShares Pure US Cannabis ETF (MSOS) , but I'm trading in very short time frames and not doing any major buying for the long term. This market still has a tremendous amount of work to do in order to return to health.

Once again, I remind you not to play the bottoming calling game. The goal should be to buy sustained trends and not a low-price print. When a new bull market eventually develops, we will have plenty of time to build positions.

At the time of publication, James "Rev Shark" DePorre was Long AEHR, SKIN, MSOS.