The CPI came out today not running anywhere near the inflation target, let alone hot, which shows that for every inflationary move there’s a deflationary move in this market, Tony Greer told Real Vision during today’s Daily Briefing.

Greer noted that bonds rallied today, which triggered a dollar retracement rally and we’re seeing the fallout from that all over the screen today in the big S&P rotation. He said that he is looking for a commodities rally with an underlying inflation theme, so the CPI number today was a disappointment for him.

The inflationary feel in the bond market cooled off when the CPI number came out, Greer said, so as a result, market-based inflation readings backed off. “Everything super inflationary backed off its highs and that’s why the S&P is rotating today and ending up in negative territory,” he said.

Greer maintains a bullish outlook when it comes to the S&P. He said that as long as the Fed is still inflating assets, he will still be bullish, and the outcome of the election doesn’t really change that. He said that a Biden win would cause volatility and a dip, but he doesn’t believe that dip will be fatal because the Fed will remain the driving force in the equity market.

No matter who wins the election, Greer said that investors can take advantage of volatility so they should prepare themselves for either outcome.

Looking ahead at the rest of the week, Greer said he believes that the market is signaling that it is on a very serious tear. He doesn’t think today’s performance is bad, but rather that it is just the market taking a breath.

With the Fed trying to let the S&P run hot, and given that we’ve now cleared the dual presidential hurdles of Trump’s COVID diagnosis and his delay of stimulus negotiations, Greer believes we are now in full reflation rally mode.

“We might be in one of those periods where the stock market cruises through old highs seeing as we just pounded the downside aggressively and we’re heading into a volatile but bullish news period heading into the election,” he said.

 In response, Greer said he’s trying to stay with his long positions, move his stop losses up closer to the market to protect profits, and stick with the playbook that he’s running.