Stocks Ramp Higher
Contributed Opinion

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The USD index futures are lower by 0.50% to 109.265 while the 10-year yield is lower by 0.12% to 4.799%, and the 30-year yield is also lower by 0.06% to 4.984%.

Gold (+0.27%), silver (+0.71%), and copper (+0.13%) are all higher, while oil is down 0.61% to $76.83/bbl.

Stock index futures are up, with the DJIA up 241.7, the S&P 500 up 40.9, and the NASDAQ up 30. Risk barometer Bitcoin is rallying, up $5,734 to $97,041.

PPI

This morning, the Commerce Department in the U.S. released the monthly Producer Price Index ("PPI") with the number coming in at 0.2% versus the estimate for core PPI unchanged at 0.4% and non-core CPI at 0.3% versus 0.1% last month.

The market had been discounting a "hot" PPI, so this print comes in much cooler than the expected numbers, triggering a pop in stock futures until at least tomorrow when CPI is released but probably until next Monday, which is Inauguration Day for Trump and a market holiday for Martin Luther King Day.

Volatility

The VIX:US responded to the cooler-than-expected PPI and has backed off to 18.69 with the pre-opening call on the UVIX:US at $3.59-3.60.

I will be taking advantage of this pullback to add to volatility, which I contend will spike after Inauguration Day. As CNBC's Rick Santelli (the only CNBC anchor I like) said this morning: "The year-over-year CPI number has a "3" handle, not "2" so to think inflation is not impacting bond yields is flawed."

I will continue to hold the VIX Feb $15 calls with a view to adding on weakness this week. With CPI coming in tomorrow, today's rally could be reversed in a heartbeat.

Stocks

I flattened the SPY January $600 and $590 puts but left the $575 puts intact, looking for a "hot" CPI number tomorrow. My rationale is that the profit I took on the rebalancing and large-cap- small-cap trade more than covers my exposure on the SPY Jan $575 calls, so I can afford to speculate on weakness/rising volume later in the week. 

Again, tomorrow's CPI print could derail things quickly, so bear that in mind before taking on new positions.

GTCH/GGLDF

Getchell Gold Corp.'s (GTCH:CSE; GGLDF:OTCQB) much-awaited PEA is due out this week, and while I do not expect a massive buying panic, I do expect the results to force a rerating of valuation as they are disseminated throughout the investment community.

Sentiment for developers has not yet shifted, so it is going to take some serious marketing to move the needle. I remain confident that will happen this year and look for higher prices.