NFTRH Update, Stocks, PM’s & Commodities

Stocks, precious metals and the general commodity sector are all rising today.  The Dow and S&P 500 are right at ‘bounce’ resistance now but a negative for the bear view is that leaders like the NDX and SOX are above their 50 day moving averages.

Meanwhile the precious metals are not counter this activity.  Quite the contrary, they appear strong.  Commodities as well continue upward on balance.  Recall the CCI charts over the last many weeks in NFTRH.  CCI may have bottomed and it may also bring new wrinkles into the analysis.  The weekly chart broke out last week and is stronger still this week, and CCI is approaching the 530 level resistance that would signify a tradable bull rally if exceeded (and held).

I had been looking for a resumption to the recent market liquidation and then possibly renewed broad market upside later.  Whether it happens that way or is already happening, it may look different from what had been going on in 2013.  In this regard, it is possible that precious metals and commodities (the ‘wrong’ assets) benefit from the already embedded inflation and maybe even emerging market and Asian stocks can out perform those of the US.  That is if an inflation problem is cropping up in the US.

We have grown accustomed to having emerging markets, commodities and especially precious metals ‘in the mirror’ going down while US stocks feasted on Goldilocks’ porridge.  We will watch for signs that indeed an inflation problem could come sooner rather than later.  Crack up boom (as noted in this morning’s update)?  I don’t know about that.  But with how well worked over the markets have been with pure, balls out inflationary policy anything is possible.

Bottom Line

They put the inflation in over the last couple of years.  Maybe it is time for the ‘wrong’ assets to catch a bid.  I think silver is a key.  If it leads gold going forward we may be looking at an inflationary phase that could potentially lift many boats, some more than others.  If it does not and gold leads, we are probably on the original plan without the near term inflationary modifications.

We’ll keep track of the proceedings methodically in NFTRH.

See you Sunday with NFTRH 277.  Have a great weekend!