As a follow-up to a Daily, I wrote on January 7th, this article, yesterday’s January 23rd Daily was all about one of the 3 indicators that can get us prepared for more inflation.
On January 7th sugar was still trading under 22 cents.
Since then, SUGAR is up another 15%.
A quote from yesterday:
“Most noteworthy is the notion of supercycles.
Sugar is a great example of a 400% move higher since 2020, followed by a near 40% move lower. And currently, a 20% move up since it reached the nadir of 20.00.
Volatility-yes-the inherent nature of a super cycle.”
The second indicator I wrote about on January 7th is how Silver does relative to gold.
When silver begins to outperform gold, that is generally an inflationary sign.
This is a good time to remind you that the chart of CPI overlaying the 1970’s with current times lines up incredibly well. Has CPI troughed?
With so many saying inflation is over, clearly, they have not been paying enough attention.
Maybe now they will.
Silver, for the second day in a row, is outperforming gold.
The chart of March futures shows us that momentum could be just about to flash a mean reversion.
Furthermore, $22.00 is a solid risk point with overhead resistance at $24.
The 3rd sign is the Dollar and if it makes a more drastic move lower from its current rangebound price action.
The dollar is wedged between the 50 (blue) and 200 (green) moving averages.
We can hardly say that it is collapsing or giving us cause for major concern right now.
Momentum is declining though. A move under the 50 and 200 MAs on our Real Motion indicator might raise some eyebrows.
Especially if the price fails 102.
This week we have PCE numbers coming out. That is a lagging and not a leading indicator.
We can assume that the number will be subdued.
This should give the FED room to discuss rate cuts for March.
Hence, we can be patient on the inflation plays for now-but certainly not complacent.
ETF Summary
- S&P 500 (SPY) 480 now the pivotal zone
- Russell 2000 (IWM) 195 pivotal, 190 support to hold
- Dow (DIA) 375 support
- Nasdaq (QQQ) 408-409 support
- Regional banks (KRE) 50 key to hold
- Semiconductors (SMH) 184 support
- Transportation (IYT) 262 now pivotal
- Biotechnology (IBB) 135 pivotal
- Retail (XRT) Held support at 65 but still needs to get back over 70.00