NFTRH; Commodities, Global Stocks & Precious Metals (medium priority)

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In NFTRH 516 we talked about yields, the yield curve, silver, silver vs. gold and the possibility of an inflationary situation cropping up.

Please review pages 10-13 in NFTRH 516, which talked about the unanswered question “inflationary or deflationary?” in more detail. The point I was trying to make is that if it’s the usual deflationary resolution it would get very bearish out there across a wide range of assets/markets. But if it’s inflationary it would be more complicated with many assets potentially driven higher to varying degrees (until rising debt servicing costs start to affect the economy in the form of rising long-term interest rates).

That’s bigger picture stuff, but on the short-term commodities have been beaten down but may be making a move now. A commodity rally would likely need a weakening US dollar, which is still waffling around its SMA 50.

As of yesterday CRB index was down trending with a positive MACD divergence.


Today commodity tracker DBC is looking downright bullish. It had retained a more bullish look than CRB likely due to its particular commodity mix and today it is trying to make a new short-term high off of a pattern that formed at the moving averages. MACD, RSI and AROON are positive.

As for global stocks, as noted in the Trade Log yesterday I decided to take the profit on the ACWX (World) short position to avoid the prospect of an anti-USD bounce within the downtrend (bird in hand).

Precious metals are bouncing and with the oversold and sentiment levels they reached can get a good bump if an anti-USD trade crops up. That would be in the absence of the real fundamentals, however. If commodities and especially stocks are rising as well it would likely be more of the same for the precious metals after a bounce plays out, if applicable.

If USD were to lose its grip on the SMA 50’s support area (95 +/-), the target would be the SMA 200 (92.50 +/-). It would probably be best, pending incoming information of course, to have caution on any anti-USD trade that may crop up as the buck drops toward that area (again, if applicable since this market tends to treat us to whipsaws of one kind or another nearly ever other day).