Homage to God's Country

Without jumping to too many conclusions, it would be a nasty, 1970's-style (or worse) stagflationary setup for us to experience spiraling food price inflation all the while suffering the lingering fallout of high unemployment and cities like New York dealing with real estate and small business (restaurant and bar) collapsing prices, for example, not to mention plenty of other parts of the country. 

Thus, we will take things one at a time and see how trends unfold. 

With this in mind, there is no doubt that the DBA, which is an ETF for a basket of soft commodities, has been steadily improving throughout the summer.

While crude oil has been skittish, at best, and precious metals digested their prior gains quietly, softs like coffee, wheat, cocoa, cotton, even corn, have been improving very impressively. Hopefully, if this stagflation develops then at least the American farmer will benefit as a silver lining (The stagflation would turn into vicious outright inflation if the banks begin liberally lending to anyone with a pulse, by the way, among other factors like The Fed buying stocks open and notoriously and going to negative rates, etc.). 

For now, coffee (JO) and wheat (WEAT) look like two of the most actionable long ideas in the soft commodity space. Furthermore, what you like to see form DBA, on its daily chart, below, is the 200-day moving average (yellow line) backtest successfully hold of late. A push over $15 seems like the net logical hurdle.

As for equities this morning, the pop above $280 on QQQ struggled and now we have the makings of a possible range into the FOMC next week, unless bears can take the initiative and trap in yesterday (and this morning's) buyers.