However, assuming the disinflation>deflation scare view is correct, there should come another inflation problem, perhaps in 2024. If the current view is not correct, we’d have the likes of the situation discussed at length last week, a global anti-USD trade. That would bring commodities front and center again, sooner. So by no means am I abandoning interest in commodities, especially uranium, copper, battery metals and energy. For now…
Now it gets interesting. The Gold/Silver ratio (GSR) made an impulsive jump and now we’ll see if the old rule still applies. That rule is that the USD gains a liquidity bid if the GSR continues upward. Might it have been a knee-jerk in the GSR soon to fail? Sure. Might it have been the start of something bigger? Sure might have been.
As for USD, it is obviously still bearish as it tests the downtrending daily SMA 50 with resistance above, including at the SMA 200, which appears to be rolling over.
The weekly chart lends more perspective. USD is thus far holding support from the 2020 high and reversal, and a monthly chart (not shown this week) would display even more solid support and an ongoing longer-term bull market. As for the near-term, if it ain’t broke, it ain’t the foil for a widespread global inflation trade. In other words, Uncle Buck holds the pattern’s neckline. Should that be lost, we’d think hard about a global asset party lasting approximately to point ‘C’. But as yet, the Gold/Silver ratio begs to differ if its breakout leads to more upside.
Daily currencies for your review, with the blue SMA 50 the key to existing intermediate trends.
Finally, weekly Bitcoin halted right at target (30000+) and is turning down. If USD fails, expect this digital speculation to bust through resistance. If not, BTC could be back on the Sub-12000 Express.
Savings balanced by gold.
Trading Account: Short Industrials (XLI) & Metals/Miners (XME)
Roth IRA (non-taxable, no contributions)
Cash is at 87% and yet there are three short positions. So the IRA is nowhere near the same time zone as invested in this market. The focus is gold mining, for reasons that only seem to get more solid as the inflation phase fades away. As I get a clearer view on this correction in the sector I’ll plan to add positions if all stays on plan in the macro. But #patience all around. I want to try to get this right. But it could takes weeks/months to play out. So, still taking it week-to-week and fine tuning the view.
Cash & income-paying Equivalents are at levels that are right for me and my real-world situation. Your situation is different. Cash will be adjusted as needed.
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