Another Hot CPI

Good morning. Consumer prices in the U.S. increased for a sixth straight month in June and costs excluding fuel and food (the core CPI) rose more than forecast (up 0.3%), suggesting Federal Reserve policy makers will keep raising interest rates. June Housing Starts fell 5.3% to 1.85 million units (consensus 1.90 million) while Building Permits fell to 1.862 million units (consensus 1.92 million). Premarket futures have been volatile this morning, with a negative bias following the CPI.

We have the EIA Petroleum Status report at 10:30AM. Also, earnings reports are starting to pick up the pace and we have a number of closely followed stocks reporting today and tomorrow. Yahoo's report certainly hasn't been helpful to the bulls this morning.

Gainers in premarket trading include ILMN, NICH, IHR, NITE, DTLK, IOTN, LUV, FCEL, ELSR, ET, UNH, JPM, XING, ERICY, and FRO. Stocks moving lower in premarket include YHOO, DTAS, ADCT, JAKK, ANDW, RMBS, WIT, AFFX, NTES, OSTK, BIDU, TTM, RTK, EBAY, BIDU, GOOG, and GLD.

Can the bulls hold the line here, if not build on yesterday's gains? Much will depend on what Bernanke says. Clearly, the data and the headlines so far this morning do not support a large rally and while oversold conditions can help lend support, without something else, we're in for some more nerve rattling (i.e. increasingly volatile) trading ahead. Traders who bought yesterday have their sights on yesterday's lows and if they don't hold, it is going to get very interesting, very quickly. Let's get to work!