11Aug11:07 amEST

Sneaky Peak Inflation

This sure is a strange version of "peak inflation," with rates yawning off the cool(er than expected) CPI yesterday and then outright spiking (as TLT sells off, below on the daily chart) today on the cool PPI print. 

My view headed into 2022, as per a video I emailed to VIP Members over the holiday (and have since posted on this website a few months back) has been that rates would lead the Nasdaq and most stocks lower. In other words, as rates rise growth stocks buckle under the pressure of them being long duration assets. Clearly, much of this summer has been a reprieve for growth stock bulls and bond bulls alike. 

However, the overarching trends remain down for growth stocks and up for rates, which means as the big shots come back from the Hamptons in about a month we ought not lose sight of the forest for the trees. 

Furthermore, each rally we have seen in financial assets after the CPI, then PPI, only serves to loosen financial conditions and undermine The Fed's inflation fight. 

As noted, the boogeyman beyond rates is another spike in commodities, namely oil, gas, and softs. 

Regarding my trades, I sold the remainder of a FSLR long into strength, having been hedged up with commodity-oriented long mostly and am underwater on some bearish bets at the moment. 

However if the TLT breakdown from the highlighted bearish rising wedge, below, proves true I expect the bear market in both bonds and the Nasdaq to resume in short order. 

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