Lesson 2
Data Release Trading
Data matters, but context determines interpretation. Same data point can be bullish or bearish depending on regime. Always know 'what the market wants' before the release.
📊 Indicators mentioned in this lesson (click for details):
Economic data releases move markets. Here's how to trade them with macro context.
The Major Releases:
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FOMC (8x/year): Rate decision + statement + projections. THE most important.
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NFP (PAYEMS) (Monthly): Employment report. Sets recession/no-recession narrative.
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CPI (Monthly): Inflation. Determines Fed flexibility.
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PCE (Monthly): Fed's preferred inflation measure.
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ISM (Monthly): Manufacturing/Services sentiment. Leading indicator.
The Trading Framework:
Pre-Release:
- Know consensus expectation
- Identify regime context
- Size position for potential surprise
- Have both bull and bear scenarios ready
On Release:
- Note deviation from consensus
- Watch initial market reaction
- Don't chase the first move (often reverses)
Post-Release (30-60 min):
- Once volatility settles, assess new regime implication
- If data confirms regime: Add on dip
- If data challenges regime: Reassess thesis
The Counter-Intuitive Reaction:
Sometimes bad news is good (Fed will ease) and good news is bad (Fed will tighten). The macro context determines interpretation:
- Late cycle: Bad data = Fed pivot hopes = bullish
- Early cycle: Good data = recovery confirmation = bullish
Know the regime to interpret the data correctly.
Check your understanding
Lesson Quiz
Quiz Check
CPI is released hotter than expected in a late cycle environment where the Fed has already signaled pausing. How does the market likely react?