Celebrating the Retreat

Despite a hot PPI inflation reading this morning sending rates on the 10-Year Note higher yet, equities seem far more focused on the apparent retreat and easing of tensions by Russian forces staving off imminent war with Ukraine for all the world to see. 

As we saw in late-January through the beginning of this month, bear market rallies (in tech/growth) tend to be sharp and convincing, but ultimately doomed. Of course, many debate whether we are, in fact, in a bear market with respect to growth/tech, while others are convinced we put in major lows a few weeks prior even if we were in a bear. 

My thinking here is that if we see the QQQ ETF fade back below $352 level today, an important technical level we have been tracking close with Members, then it opens the door to an entire fade of this Russia rally. World War III or not, inflation is not going away anytime soon.

And, despite how many folks on television and social media are hellbent on saying that all things inflation have already been "priced in" by markets, I am convinced the parallels to early-2008 are similar insofar as the consensus back then being that the market had already "priced in" the subprime crisis as it was in the news every day back then the same way inflation is today.

Needless to say, the full effects of high and sticky inflation have not been priced into markets. 

Also keep an eye on gold miners into this dip, with the GDX coming off its 200-day moving average, coinciding with the news which often makes for opportunity after the last few weeks of improved price action.