Maybe inflation is transitory?Money printing in real terms is admittedly at the top of the historical range of this data set but its not beyond what we have seen.
Maybe inflation is transitory? Maybe it's not. It is clear that a vast majority of the additional money printing causes asset inflation otherwise this chart would look a lot different. i.e. if gold didn't have a significant move up then this chart would have broken out to a new ATH a long time ago.
Yes these charts are Raoul Pal inspired so nothing original is going on here but I find the idea of making gold the denominator or unit of account, to be a fascinating lens to view things.
Inflationhedge
DBB - Inflation be thy nameLot of "China is falling apart news" sell your metals recently such as:
www.kitco.com
IMO that story isn't going to age well at least in the near term... market buying the bad news. Recent new high on DBB. Copper looking bullish again too. Turns out the world still needs a lot of metal.
Based upon that recent high and bull-flag - DBB hitting $22 = very likely.
Inflation looks like it is ready to ROAR! At least for a bit longer.
Not financial advice.
$USB: Monster setupAll timeframes are setting up for a big move in $USB here, daily is kicking off a fresh uptrend after the recent bottom, weekly and monthly are about to trigger a trend as well, and by EOY the yearly will flash a 10 year uptrend signal which aims for somewhere between $220 and over $1600 per share by the year 2030. I think overall, the return vs risk proposition here is tilted significantly in our favor to buy both speculative swing positions, as well as potential long term positions too.
Keep a close eye on this setup, might be extremely rewarding and it is extremely low risk considering the potential upside at hand...
Cheers,
Ivan Labrie.
URA to the Moon (Uranium)Uranium will be entering a breakout over the coming years.
Demand for energy will skyrocket as problems began to surface in current infrastructure.
The technology has advanced by leaps and bounds. Going Nuclear will continue to be the narrative driving Uranium demand and mining companies.
See you in the future of energy.
Expect the price of your cup of coffee to increase. We have both technical and fundamental justifications as to why coffee is the next inflationary trade to jump into.
With supply chain issues and the seasonal changes in Brazil affecting coffee production and shipping, we can expect the value of the black breakfast gold to rise. Latin American coffee farmers are also reported to have gone on strike in the last few months to demand better prices for their produce as they are barely turning a profit.
Technical wise, the symmetrical triangle break shows us the fundamentals are playing out on the charts.
How Gold Responded in HistoryHow Gold respond in past specially in 2008 crisis and we are again in speculative time where stock prices are matter but not real value.
Between stock and gold gape is going wider but there a place where these can work as magnet and come to close again.
If bad time come I'm sure peoples will only look stable defense wall
Future Gold analysis using market geometry & cyclesLooking out into the medium term future of gold we can find likely points of price weakness using cycle analysis and then pairing that with market geometry we could also spot potential price target zones.
My chart calls out December 2022 as a danger zone!
Obviously a lot can happen between now and then but if the price continues to trade in the same trading channel that it has been following and breaks through the current upper resistance of ~$1920 then we could be in for a decent move up in gold followed by a sell off going into December 2022. The diagonal channel lines of the pitchfork tool have been well respected so I would expect a pull back to land on, or close to one of these lines/levels, I guess it depends on what is the underlying driver of the fall as to how deep the sell off will be. But I do believe some form of sell off is likely, as when you look back at the past 4 bottoms of the time cycle bubbles on the chart they very much line up perfectly with sell offs.
Starting from left to right we can track:
- Cycle bottom 1 sell off in Oct 2008 which was ~34%
- Cycle bottom 2 sell off in May 2012 which broke the top of the 4yr bull run, here the market loss is ~21%
- Cycle bottom 3 sell off in Nov 2015, where the market went sideways for a year after the previous sell off and then eventually broke into a full bear market for a ~41% sell off
- Cycle bottom 4 sell off in May 2019, this was only a small sell off of ~7%. The bigger sell off was a few months before hand and this was likely a shake out before a parabolic move up.
Further to the cycle bottoms if you look at the midpoint of each cycle there are also sell offs very close to the peak as well.
To wrap up I think Gold is a great long trade to be in now as we are seeing inflation popping and equities getting toppy and I'd say we will see a big move up once the current resistance level is broken. But the historical evidence is to strong to ignore so I won't be caught holding any gold positions or stocks in the lead up to December 2022.
**This my personal opinion and I'm not a paid advisor so please DYOR research before investing your cash**
BULLISH on SilverHey Traders,
I want to share with you guys the multi month ascending triangle I've spotted on Silver. I'm very certain that at some point soon we will have a massive breakout as we've been accumulating for almost a year! Couple that with the coming inflation and cycle out of risk on assets and we have ourselves a winner. This trade will probably take some time to play out but it looks very promising! As always remember exercise good risk management and like and follow if you found this helpful!
Support/Resistance EBON & InflationIt's been said Bitcoin could be a hedge for inflation..... digital gold...Whatever the case, crypto stocks and miners could be something to keep in mind. EBON has gotten beaten up pretty good and is back at the historic support/resistance level. IF the inflation speculation is accurate, it'll be interesting to see if the stock can firmly break back above this level.
"Ebang is considered a relatively pure-play cryptocurrency stock as hot produces circuit chips and crypto mining machines in China. Both of these items are in high demand right now, coupled with a major shortage. Because of this, many investors are bullish on the future of the tech industry, and specifically with crypto mining companies like EBON stock. With this in mind, is EBON worth adding to your list of penny stocks to watch?"
Quote Source: Best Penny Stocks to Buy Ahead Of Inflation? 3 To Watch Right Now
RIG Channel trading right nowRIG still holding a relatively clear channel right now. I think with the discussion on inflation it could get (and seems to have gotten) folded into the "inflation strength" conversation.
"So, why exactly is Transocean a play for inflation? Well, as stated earlier, energy penny stocks have a great amount of demand to contend with. This demand increase could result in increased financials for the coming periods."
Quote Source: Best Penny Stocks to Buy Ahead Of Inflation? 3 To Watch Right Now
Go for Gold!Gold is looking really bullish now. Perhaps it should challenge its last year high again soon. Looking at the 10 year chart, we can clearly see a cup with handle formation that is just waiting for breakout at around $1916. Based on the depth of the cup, we could potentially see a price objective of $2700. This is definitely a good hedge for inflation. Go for gold!!
Dislaimer:
This is by no means a recommendation to buy/sell. The ideas shared here are mainly for educational purpose only. Please consult your financial advisor prior to any investment decision.
DBA riding the trend upThis ETF has been my favourite since 2020. With the scarcity in supply from agriculture segment and the incoming waves of inflation, this could be one good bet for agriculture sector. It's looking like a small cup and handle with the neckline at 19.19, it's looking pretty good if there's good volume to push for breakout. Let's see how the US Market goes for next week. DBA has been riding on a good uptrend since June last year and looks very likely to continue further.
XAUUSD dropped as Yields Adjusted to Inflation ExpectationsThe XAUUSD dropped markedly yesterday as yields adjusted on the initial jobless claims and ADP beats. This is an interesting and potentially telling reaction. The yield adjustment likely came as inflation expectations were altered by the market. We also refer to the USDOLLAR which appreciated as the US10Y adjusted. It is often said the XAUUSD is a hedge against inflation but yesterday’s move was contrary to this. Therefore, as and when nominal yields make further adjustments we consider it prudent to look at the XAUUSD response relative to the USDOLLAR reaction to help with the analysis of direction.
Bull Flag on HBANBullish flag formation on HBAN.
Different entry points annotated.
HBAN is trading at a 13.79x P/E ratio versus 22x @ SBNY, 19x @ SIVB, 29x @ FRC, or 15x @ RF & FITB.
The benefits from acquiring TCF bank will begin emerging over the course of the rest of this year and be in full effect in 2022.
GOLD (Inflation Hedge)As previously mentioned in my outlook of SPY , the best way to play this is ticker GOLD. Barrick recently breached the 200 day MA and is currently resting here. Today it traced back down to 200MA and went back up. There are buyers here waiting to see what happens. If you read my SPY idea, you can look back and see what happened around the end of 2018. Gold Futures went up alot but was also trading between 1200-1300 per ounce. Current Gold Futures is at 1890! I see a big huge upside for Barrick here. I hope you see it too.
A good old hedge against inflation If inflation is given and interest rates do not rise, expect negative real rates on long-term bonds. If inflation rises faster than the possible rate hike, expect negative real rates on long-term bonds.
If real rates on long-term bonds fall, expect a rise in inverse ETFs like this one. They have been one of Burry's bets to protect himself from the inflationary escalation that he foresees.
AMEX:TMV
The latest report of the portfolio positions of Scion Asset Management was published last Monday, May 17, I recommend checking it out.
Vix could have one last spikeThe VIX could have one last spike left in it before it settles down for this secular bull market run. When it settles down it should settle below the '20s but until then a potential catalyst for another spike could be the June 10th CPI release or if a member of the Fed mentions tapering. If numbers come in hotter than expected again, there could be a frantic sell-off accompanied by a spike in the fear index as people worry it is non-transitory.
I am still overall bullish on the market since we are in a secular bull market but corrections are normal, healthy, and necessary in order for the market to take the next leg higher. BMO came out with a year-end target on the S&P of 4500. Some projections show that inflation could run hot for 6 months, which would be transitory. As for the damage it could do to the underlying economy, that is unknown. As for equity, stocks are a natural inflation hedge.
The Inflation has LandedThe media has recognized and confirmed what we have been warning about for some time, that inflation was on the way. Well it is finally here.
‘The accommodative/bailout policies of Greenspan and his protégé Bernanke as figureheads of federal intervention and involvement into financial and monetary affairs and their ability to arbitrarily yield federal power have done nothing more than turn market participants into Pavlov’s dogs. The money they have materialized and forced fed into the global financial system without any commensurate increase in production in their economies is money in search of mischief and is very likely to find it…in the form of very serious inflation.’ theimpartiallens.com March 2015 & 2020
‘The powers that be have had to intervene in every crisis we’ve had since the 1980s. and since The Great Financial Crisis of 2007, we now realize that we can never ever stop printing money. It is inflate or die’. theimpartiallens.com February 2021
Cost-Push Inflation
The only people who can’t see the inflation are the authorities who are printing the money. They use the corrupt and decades old revision of the CPI. Meanwhile inflation is rampant in the real world. We mentioned in the following piece theimpartiallens.com that inflation manifests itself in different ways. It can go into stocks, bonds, foreign countries, oil, crypto, your health costs, your housing costs, educational costs, etc. The powers that be can live in denial and it’s not a river in Egypt. But the inflation we warned about that is now taking shape, the one they fear, the one that will bring about the revolutions, is cost-push inflation, especially food price inflation. They will try to disguise it for a while longer with shrinkflation, but when the masses realize that they are spending the same, but their kids are still hungry…watch out!
One of our favorite investment themes ie. 'Real Assets' has finally caught a bid since the summer of 2020 as we can see from the performance of the following ETF’s:
Agriculture (DBA) +45%
Commodities (DBC) +72%<
Base Metals (DBB) +69%
Agri-Business (MOO) 75%
Uranium (URA) 112%
WTI Crude Oil (DBO) 111%
Water (FIW) 64%
Palladium (PALL) 61%
Brent Crude Oil (BNO) 117%
Rare Earths (REMX) +172%
Copper Miners (COPX) 300%
Lithium (LIT) 148%
Cannabis (YOLO) 150%
Time to Rebalance Portfolios?
No harm in taking SOME crypto gains and buying some real stuff! Gold, Silver & the mining companies look interesting here. We went long the following six ETF’s in March/April 2020 in anticipation of upcoming inflation: GDX (Gold & Silver Miners), GDXJ (Junior Gold & Silver Miners), WPM (Gold, Silver, Palladium, Cobalt), WTR (Water), GLD (Gold), COW (LIvestock).
‘Nobody ever lost money taking a profit.’ Bernard Baruch
“Art is making something out of nothing, and selling it.”
― Frank Zappa
theimpartiallens.com