The metal with the Economic Ph.D. has cracked support at 2.75 (which includes the SMA 50), turning it to resistance. It’s at a short-term support area at the SMA 200 with the next support at 2.62.
We had an NFTRH update yesterday morning in pre-market as it was just touching that former support. Doc and several other indicators were shown that begged a level of caution on the global macro reflation trades.
“Well folks, here we are well into January and some indicators are on the verge of turning negative. If they go that way the indication would be that disinflation, contraction and/or liquidity problems are surfacing again and caution should be exercised on commodities, related sectors like energy and materials and eventually the broader stock markets.”
Here’s the weekly view of a thus far failed attempt to even test the key $3/lb. level. No single indicator – even one with a Ph.D. – is the be all, end all. The problem being that we’ve been cross-referencing the good Doctor with other indicators saying the same thing.
Separately, a well known deflationist flipped this week to an inflationary view using copper as the reason. I am not going to poke any fun or even name him because I like the guy. I don’t think he’s part of the usual clown show of commentators out there. But it is notable that a deflationist flipped before copper even took out 3, and then… this.
Caveat: Is this Corona virus related? I am so used to down playing alarming news events that I could be discounting any ongoing contrary indication and positive opportunity it may be presenting since I personally have not raised a pulse over it, as I have not with the trade war and so many other events.
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