04Aug10:01 amEST

Going Stag

This morning's notable miss on the ADP jobs number saw and interesting reaction, with gold popping and stocks slumping. While this is far from a broad-based bloodbath (see the Nasdaq hanging tough as usual), gold is on the move again, indeed, perhaps indicating a stagflationary interpretation by markets. 

As you know, the stagflation of the 1970s saw slowing growth coupled with higher inflation, a nasty two-punch combination. Gold flourished in that environment, while stocks alternative between trading in a massive range and dealing with grueling bear markets humbling all of the cocky "Nifty Fifty" bulls from the 1960s. 

Fast-forward to today, and while there are certainly economic differences between now and 70s, recall that no two cycles are exactly alike. Still, if the GDX can clear $36 here and not look back it is a bullish development for the precious complex any way you slice it.

With HOOD getting halted multiple times already today in its upside spiral, it reinforces just how unique of a cycle we are still operating in under this activist Fed regime (and has been the case, in essence, since at least 2009 if not the Greenspan years). Timing the precise end of a bull market has always been a uniquely difficult task, more difficult than nailing a bear market bottom even. 

But in this particular time period it is an even more arduous task. Thus, perhaps the focus should be on whether the gold (and crypto...maybe) signal that enough is enough in the form of a rip-roaring higher rally to drive home the idea of just how truly absurd this monetary policy regime has become. 

Look Here for the Next Play ... Rough Nights at the Casino


This website is intended for educational purposes only. | © 2021 MarketChess.com | All Rights Reserved | Website design by Saco Design | Superpowered by Site Avenger

mobile site | full site