GM Lark Traders. This is Lark Digest, where we break down market-moving news events like a bear eating fresh salmon. Things could get messy, but by the end, there’s nothing left to go over.

On today’s menu:

• Revealing yesterday’s CPI breaches 😬

• Your 3-month trading guide ✅ 

• What makes Lark different? 😏 

😬 Revealing Yesterday’s CPI Breaches

Trading during important news events is like speeding when you just got your license. You know you shouldn’t, but it’s just too tempting.

And as always, we saw this play out during yesterday’s inflation report.

But surprisingly, it seemed like, for the first time, more traders passed their challenge than failed.

I was so confident with the early numbers that I even put out the following tweet.

But it looks like that was a little premature…

After running the numbers, once again, more traders failed by trying to trade a news event than pass.

More specifically:

• 55% of accounts were breached yesterday.

• 45% of accounts passed their assessment.

So, my tweet wasn’t too far off.

But overall, it was still ugly.

Here are some thoughts.

• Trying to trade the news is a gambler’s game. Even for the traders who passed, had the CPI figure been different, they would have failed just as easily.

• This isn’t an outlier. Almost 100% of the time, more traders breach from trying to trade the news than pass.

• The inflation report will be driving markets for the next three months (at least). Let’s dive into what’s going on.

✅ Your Guide To Trading These Markets

I went to the driving range earlier this week and paid $12 just to hit a bucket of balls into the woods.

I thought that was expensive (and painful), but it turns out my hunch was right.

Yesterday, we found out that:

• Year-over-year inflation is 3.5% (that’s even uglier than my golf slice).

• Last month alone, prices rose 0.4%.

To put this into perspective, inflation has now been over 3% for 36 consecutive months.

So, if you’re feeling pretty bad about all of this, you’re not alone.

The market took a big 📉 when the news came out.

So, I want to break down what’s happening here and what it means for traders over the next few months.

1/ Bad For Stocks

Inflation continuing to be high means one thing and one thing only:

• Higher interest rates for longer.

And that’s exactly why we saw stocks drop yesterday.

You see, higher rates mean:

1. It’s more expensive for businesses to borrow.

2. It slows down economic growth.

3. People have less money to spend on other things like restaurants or shopping.

After all, if people pay more every month on their mortgage, they have less money to go shopping or drop money on a new golf set like I’m dreaming of.

The Dollar, on the other hand, though, is feeling nothing but good vibes.

2/ The Dollar Continues To Win

The Dollar was like a kid in a candy store yesterday but without the sugar crash two hours later.

Why did stocks crash and the Dollar fly? As Lark Traders, this is important to understand.

The answer?

Risk-sentiment.

Here’s what you need to know:

• Stocks are considered risky. When traders and investors feel risk-averse, like when they find out interest rates will be higher for longer, they sell their stocks.

• The Dollar, on the other hand, is a safe haven. Remember what happened in March 2020? The Dollar SOARED. And that’s because everyone was pessimistic.

So, what does this mean moving forward?

3/ The Game Plan

So now we know:

1. Inflation is still out of control.

2. Why stocks crashed yesterday.

3. Why the dollar is so strong.

But how can we profit from this? How can we make the big bucks?

We’re not financial advisors, but this is what we’re looking at.

1/ Long the Dollar until inflation subsides. The Fed wants inflation down at 2%. But as Pomp points out, the Fed is losing that war.

2/ Always long Bitcoin. If you’re new here, we’re big Bitcoin Bulls. With a fixed, decentralized supply, it will always do well in a period of high inflation.

3/ Fundamentals > Technicals. Perhaps it’s an unpopular opinion, but we think fundamentals truly drive the market. As we saw yesterday, these big events move the market, so we’ll be keeping a very close eye on things.

Lucky for you, we’re doing the hard work and sending it to you for free! 3/

😏 What Makes Lark Different?

Okay, it’s time for a little Thrill of the Shill.

At Lark, we’ve grown quite a bit over the last couple of weeks, and we’ve been asked a few times, what makes us different?

So, let’s cut to the chase.

The reality is that traders are struggling. From firms closing down left and right to denied payouts everywhere, traders deserve to know.

So here are a few points:

1. We’re no longer the new guy on the block. On June 1st, we’ll be two years old (are you coming to our birthday party?). That makes us one of the older kicks on the block.

2. In that time, we’ve never denied a single payout—that’s 680 days, to be exact.

3. We never sacrifice professionalism. I don’t know about you, but personally, I’m tired of influencers with neck tattoos getting into fights on Twitter. It’s time for this industry to evolve.

4. Sustainable + No hidden rules. This is a big one and speaks for itself. No, we’re not the easiest or the cheapest, but you’re paying for quality and reliability.

As always, if you have any questions or concerns, reply to this email, and we’ll gladly help you out!

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