The July Producer Price (PPI) Index followed in the steps of the July Consumer Price index (CPI) report yesterday as headline PPI for the month contracted 0.5% on a sequential basis and came in at 9.8% on a year over year basis, below the consensus forecast of 10.4%.

While the core PPI figure for July matched the consensus forecast of 7.6% on a year over year basis it was down vs. June's 8.2% reading while its month over month comparison fell to 0.2%, also below the consensus forecast.

In response, equity futures were moving higher this morning pointing to another positive day for the market and the AAP portfolio. While we and members should enjoy that as stocks continue to recover lost ground from the June quarter, we will also keep a close watch on the technical set up of this market given its sharp increase June 16 that has it severely overbought.

It may not be a surprise to some, but we've also seen a strong shift in the emotion driving the market as the CNN Fear & Greed index has rebounded to 52 (Neutral) from 27 (Fear) a few weeks ago. Looking at the VIX, it's very oversold, signaling a high level of complacency in the market.

As we've discussed many times, emotion and hopium can be tricky beats when it comes to investing and with that in mind, we'll continue to focus on both upside to be had in the market and the portfolio's line up as well as potential risks ahead.

We have our technical eyes on the 4,270-4,300 range for the S&P 500, and one of our concerns is the relief rally we are seeing between yesterday and today overlooks the work that still needs to be done to return inflation to the Fed's 2% target as well as the natural slowing of the economy from its recent interest rate hikes and those yet to come.