CPI D-DAY: Markets Brace for Inflation Shock as China Chip Deal Ignites Semiconductor Rally

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MARKET SUMMARY

THE BIG PICTURE: Markets are coiled like a spring ahead of Tuesday's 8:30 ET CPI release - the most important economic data point of the week. The S&P 500 closed Monday chopping around the critical 6410 pivot, setting up a classic "buy the dip" vs "sell the rip" battle that will be decided by inflation data.

OVERNIGHT GAME CHANGER: The Trump administration struck a breakthrough deal allowing NVIDIA and AMD to continue selling AI chips to China in exchange for a 15% revenue share to the US government. This policy clarity sent semiconductor futures surging and removes a major overhang from the AI supply chain.

AFTER-HOURS FIREWORKS:

• 🔴 BBAI crashed -27% on earnings miss and slashed guidance

• 🟢 WOW exploded +48% on takeover rumors from DigitalBridge

• 🟢 AVTR jumped on activist investor demands for sale

• 🟢 ASTS gained on satellite launch timeline clarity

CPI STAKES: Options markets are pricing a 1% move in either direction. JPMorgan sees 60% odds of inline-to-cool data that could spark a relief rally to 6450-6452, but any upside surprise above 0.40% could trigger a -2.75% selloff.

THE SETUP: ES remains in "buy the dip" mode since April, but Tuesday's CPI represents the ultimate test. Bulls control above 6333, bears need a clean break of 6387 to gain momentum.

HIGHEST CONVICTION PLAY: Long ES on any CPI-induced sweep below 6407 that quickly reclaims 6410 - the day's most critical inflection point.

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Monday's Action: Markets ended mixed as Trump's 90-day China tariff extension provided temporary relief, while traders positioned defensively ahead of Tuesday's critical CPI print at 8:30 ET. The S&P held above key support at 6333, with the "buy the dip" regime intact since April.

Key Stats:

• S&P 500: Holding 6390s (Bulls control above 6333)

• VIX: Elevated ahead of CPI

• Breadth: Narrow, led by semiconductors and crypto plays

• Gamma Focus: 6400 and 6450 strikes critical for dealer hedging

📈 CPI SCENARIOS & MARKET REACTION PROBABILITIES

JPMorgan CPI Scenarios:

• 5% chance >0.40%: SPX -2% to -2.75% 📉

• 25% chance 0.35-0.40%: SPX -0.75% to +0.25% ⚖️

• 35% chance 0.30-0.35%: SPX flat to +0.75% 📈

• 30% chance 0.25-0.30%: SPX +0.75% to +1.2% 🚀

• 5% chance <0.25%: SPX +1.5% to +2% 🚀🚀

🔥 SECTOR LEADERSHIP & ROTATION

ADVANCING SECTORS 📈

• Semiconductors: China deal optimism, NVDA/AMD strength

• Crypto-Related: BMNR, MSTR, crypto miners

• Payments: Fintech plays benefiting from rate cut hopes

• Metals: Lithium/rare earths (ALB, MP, SQM up 7-10%)

DECLINING SECTORS 📉

• Software: Continued pressure post-earnings (MNDY -26%)

• Housing: Rate sensitivity ahead of CPI

• Energy: Despite tariff relief

• Consumer Staples: Defensive rotation out

MAJOR OPTIONS FLOW & WHALE ACTIVITY

Bullish Flow Leaders:

• BMNR: 472K contracts, Sept $80 calls active

• Tesla: Aug 29th $380 calls, Dec $340 puts (strangle setup)

• SPY: 24K Aug 29th $647 calls, positioning for CPI pop

• AMD: 18K Aug 29th $200 calls targeting NVDA earnings week

Bearish Hedging:

• SPY: Sept $618 puts, October $592 puts

• SMH: Sept 12th $285 puts vs $262.50 puts

• Software names: Continued put buying

🚀 CRYPTO & DIGITAL ASSETS MOMENTUM

Ethereum Leading Charge 🌟

• ETH: Up 7% to $4,200, highest since December 2021

• Catalyst: Short liquidations ($207M), gamma squeeze dynamics

• BMNR: Largest ETH treasury globally driving stock price

• ETHA ETF: $2.7B+ volume, massive institutional flows

Bitcoin ₿

• Current: Testing ATH resistance around $112K

• IBIT: Options activity suggesting continued bullish sentiment

• Key Level: Clean break above $115K targets $125K+

🏛️ TRUMP IMPACT & POLITICAL CATALYSTS

Major Developments:

1. 90-day China tariff extension - Market relief rally

2. Intel CEO meeting - "Very interesting," potential chip deal

3. Fed Chair considerations - Bowman, Jefferson, Logan in mix

4. NVIDIA China licensing - 15% revenue share deal structure

Trump Momentum Trades:

• INTC: Direct beneficiary of admin meetings

• Domestic chip names: Potential policy winners

• Defense/Infrastructure: Continued policy support

📊 EARNINGS & CATALYST CALENDAR

Tuesday After Close 🕐

• CRWV: AI infrastructure play, 19.5% implied move

• CAVA: Restaurant growth story

• TME, SE, ONON: International exposure names

This Week's Key Reports:

• CPI Tuesday 8:30 ET 🚨 - MOST IMPORTANT

• PPI Wednesday

• Retail Sales Thursday

• OpEx Friday - Potential support/resistance

⚠️ RISK MANAGEMENT & KEY LEVELS

Critical S&P Levels:

• Bull Control: Above 6333 (macro pivot)

• Resistance: 6415 trend line, 6426-6429 supply

• Support: 6387 major, 6372, 6355-6357

Risk Factors:

• CPI upside surprise could trigger 10% scenario to 6305

• China trade developments - extension is temporary

• Narrow breadth - concentrated in few names

🎯 TOP CONVICTION PLAYS FOR TUESDAY OPEN

1. CPI Reaction Trade - ES Long

• Wait for: Initial trap completion, then long reclaim of 6410

• Size: Reduced until acceptance above key levels

2. BMNR Continuation

• Strategy: Any morning dip to $50-52 for swing position

• Catalyst: ETH momentum + options gamma

3. Semiconductor Selective

• Focus: INTC on Trump meeting, AMD on NVDA earnings setup

• Avoid: Broad exposure until China clarity

4. Crypto Ecosystem

• Direct: ETH-related plays, BMNR

• Infrastructure: MSTR, COIN on any dips

📋 OVERNIGHT DEVELOPMENTS & EARLY WATCH

Futures Action:

• ES testing 6390s, holding above key 6387 support

• China markets mixed on tariff extension

• Crude oil steady, gold continued weakness

Pre-Market Movers:

• BMNR: Continued strength in extended hours

• INTC: Maintaining gains from Trump meeting news

• Tech: Mixed ahead of CPI

🔮 WEEK AHEAD OUTLOOK

Wednesday-Friday Focus:

• Wednesday: PPI data, tech earnings continuation

• Thursday: Retail Sales, more earnings

• Friday: OpEx dynamics, weekly settlement

Next Week Setup:

• Monitor CPI reaction for trend continuation

• Jackson Hole prep (if scheduled)

• Earnings season wind-down

💡 FINAL STRATEGY NOTES

Overall Approach: Trade reaction, not prediction to CPI. Let the data set the path and engage only at planned levels with acceptance.

Position Sizing: Smaller during first hour volatility, normal size once direction confirmed.

Key Insight: Market has been resilient with "buy the dip" mentality since April. CPI represents key test of this regime.

💰 DON'T JUST READ ABOUT PROFITS - MAKE THEM WITH US LIVE

HERE'S THE REALITY: Reading market analysis is one thing. Actually executing profitable trades in real-time is everything.

🔴 LIVE TRADING TOMORROW IN DCG MASTERMIND

While you're reading about the CPI setup, we'll be trading it live with our DCG community. Tomorrow at market open, we'll be executing these exact trades - the ES long setup at 6410, the semiconductor plays, the crypto momentum trades - all in real-time with precise entries, exits, and risk management.

🎯 OUR COMMITMENT TO YOU

We don't end the call until EVERYONE is in profit. That's not marketing speak - that's our daily standard. When the CPI data hits at 8:30 ET and the market starts moving, you won't be guessing about entries or second-guessing your exits. You'll have our entire team guiding every move.

📈 THE DCG DIFFERENCE

• ✅ Live trade execution with real money

• ✅ Exact entry and exit calls

• ✅ Risk management in real-time

• ✅ No one left behind philosophy

• ✅ Daily profit targets hit consistently

🚨 STOP BEING A SPECTATOR

If you have the time to read this newsletter, you have the time to actually make money with us. These CPI trades, the semiconductor breakouts, the crypto momentum plays - they're all happening tomorrow whether you're watching from the sidelines or profiting alongside us.

Ready to turn analysis into actual profits?

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Because reading about 6410 reclaims is one thing. Actually banking profits on them is what pays the bills. 💸

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