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Reflation

Decoupling trade in the making gets a Like from ProfZero! 👍🏻INVESTMENT CONTEXT In a remarkably divergent trade, on May 19 BTC regained USD 30k threshold and many Layer-1 currencies (ADA, ETH, XRP) moved up at least 4% while the S&P 500 headed towards the 7th consecutive week in red U.S. President Joe Biden is touring Asia in an attempt to launch the Indo-Pacific Economic Framework (IPEF), countering criticism that American interest in the region had mainly security components German industrial goods producer prices rose by 33.5% in April, setting a new record on the back of sharp increases in energy, metals and food prices Russia will increase its military presence in the West of the country, in response to "increased military threats" posed by Sweden and Finland joining NATO PROFZERO'S TAKE ProfZero confesses a quite puzzled feeling after May 19 trading day. What started deeply in the red staged a rebound towards the end of the session, as tech stocks, and in particular blockchain equities (CoinBase, COIN; MicroStrategy, MSTR; RobinHood, HOOD) all surged at least 4.50% thanks to cryptocurrencies refusing to sideline in bear territory. ProfZero already noticed an interesting decoupling trade between the battered blockchain space and the market at large - yet prudence calls it too early to see a harbinger of a broader risk reversal The dramatic 33.5% increase in German producer prices in April reflects how Europe's leading economy struggles to keep up with soaring energy and commodity prices as well as growing supply bottlenecks caused by the war in Ukraine and Chinese lockdowns. ProfZero can't help but to see how a portion of such greater costs is destined to be passed on to consumers - thus inevitably putting pressure on household consumption in Q3-Q4 ProfZero is not surprised about Russia's ambivalent reception of Sweden and Finland joining NATO - after all, on January 30, Nikolai Patrushev, the secretary of Russia’s security council, said "We do not want war. We don’t need it at all". True, in fact - no one needed that
CME:BTC1!
by ProfZero
$AUDJPY: Potential long signal once againI think we are about to experience a strong reflationary wave once again, we have crypto, commodities, equities, preparing to rally in a big way, and the Aussie-Yen forming a monster base. The setup here is to buy if price breaks out forming a larger range upside move vs the last daily true range (when measured from the last close to the upside). This would get my R.E.Signal indicator to flash a green triangle underneath the daily bar, would mean we are about to start a steady trend from here. We can define risk and set a stop not too far below, which is graphed on chart. The signal might not trigger in the next daily bar, but if it does, the price for entry and stop in this chart would be valid. I'll update this as the chart takes form. I anticipated fireworks in my previous $SPY publication, alerting of a broad sentiment reset forming, which should prepare us mentally for another huge 'winning' wave. The last strong trend we had was after the Pfizer vaccine announcement, when we made an absolute killing with value stocks and financials. Now we have the Merck pill announcement, potentially triggering another round of reopening optimism, setting the stage for economic recovery, the first phase of which would be reflation. Cheers, Ivan Labrie.
Long
by IvanLabrie
1
All time high break!In my "Copper could go to $8, $20 even" idea published on March 13th I explained I was looking to buy copper, and expected it to go up over more than a year. I wanted to see the price consolidate over a longer time than what it did and ideally closer to all time high. It is still possible that it will, just like gold did, after going up significantly above ATH, just like gold did. I missed out on buying during consolidation but I FOMO'ed on the ATH breakout, I'm a bit mad because I went in with only half size; I have no problem taking bad trades with full size but when I FOMO I take smaller bets even though I keep winning, the margin restrictions do not help also to be fair, once again thank you useless regulators. In the long term as I said in previous ideas, Copper $8 easy, even $20. If Yellen & the FED follow the example of Rudolf Havenstein copper $20,000,000 why not 😀 How does the CME limit up work when there is hyperinflation? Or strong inflation and strong price appreciation? NOW is the time to ask this question, it's like with negative Oil prices, you had to think about it BEFORE the events, not AFTER. Prices could get frozen. We are far from this happening, it will not happen overnight and implied volatility does not simple go from 0 to 100 overnight. For now we keep an eye on volatility and when it starts getting extreme we look for answers. And we never go all in so even if prices get frozen all our capital won't be. With Oil I was relieved to see the CME made an announcement that prices could go negative, days before it did. I checked before buying (I was trying to take advantage of the contango). What happens when prices keep going up is not clear, but if and when volatility starts increasing dramatically the CME and maybe our brokers will let us know. Remember Oil volatility increased very progressively. The second question is in the short term, meaning the next couple of weeks or even months, where could the price be heading? Will it just continue higher and higher or will it do a spike as it's doing now, then have a big correction around ATH? To help answer this question we can look at other commodities, first gold. But copper is not gold, it is an industrial metal, used for real, no one is accumulating copper as a store of value. So next let's take a look at lumber which everyone knows has been going and going and going. Lumber: retest, but only after going ridiculously high. I copper did this... I'd be happy. We can look at a couple more examples, the price action is repetitive. And what best to compare to copper than copper itself? The price before the 2005-2008 copper bull run was choppy, and it stayed choppy for a while after going past all time high. It's logical and obvious. Participants do not magically go from uncertain to mega bullish overnight, and the public (nobs) do not simply all "hear about copper" AND buy overnight. Everyone I think knows about Bitcoin, most of the public heard about it progressively over september-december 2017, mostly the last 2 months. Some day someone might have heard from a colleague "hey have you heard about this Bitcoin thing?", it's progressive not instantaneous. And then the public, "mainstreet", joined Bitcoin from late 2017 to early 2019, so over a 1 and a half year period. The price of copper was vertical before passing all time high. So I expect it to continue on the same trajectory. Simple. Just like Lumber last year. It's funny to compare copper and lumber, when Lumber past ATH in 2020 it did a doji on the daily chart, with the body in the middle, and copper just had the exact same candle on ATH last week on the 4 hour chart. Lumber is a MACHINE which has been offering the rich a crazy risk to reward. Most of us are poor plebes that cannot afford to buy a full lot of lumber (worth $100K-$200K you have to multiply the price by 110) with a risk of $10,000 and potentially much more on a gap. Plus most retail brokers do not even offer lumber. But we can buy copper mini or even micro lots. Which brings us to the third question. Where to buy? We already started to answer this question and looked at some examples. In reality I see only 2 ways to buy (be it spot or a call): - On a retest of ATH - FOMO, for example on a 1 hour red candle There is nothing in between for me, if the price reverses then I would expect it to go all the way down to ATH (implied volatility, support and all). Considering how the price has been behaving I'd expect something similar to lumber daily chart but on the 4 hour chart. I would buy any inside bar for example. Possibly even any 1 hour red candle. And as it goes up keep buying more.
COMEX:HG1!Long
by MrRenev
1
$USB: Monster setupAll timeframes are setting up for a big move in $USB here, daily is kicking off a fresh uptrend after the recent bottom, weekly and monthly are about to trigger a trend as well, and by EOY the yearly will flash a 10 year uptrend signal which aims for somewhere between $220 and over $1600 per share by the year 2030. I think overall, the return vs risk proposition here is tilted significantly in our favor to buy both speculative swing positions, as well as potential long term positions too. Keep a close eye on this setup, might be extremely rewarding and it is extremely low risk considering the potential upside at hand... Cheers, Ivan Labrie.
NYSE:USBLong
by IvanLabrie
Oranges and the Next Inflation CycleOJ1 Oranges have been building a higher low since spring of 2019 and completed the higher low in the Feb. 2020 crash. With broad commodities CRB having formed a long-term cycle low in the 1Q2020 and the global economy already heating up and many commodities already breaking out of their multi-year downtrends (Uranium, industrial metals, agriculture), it has become increasingly clear that we are in the next re-flation (growth and inflation) cycle. a higher low for oranges over a trend duration, at a time when most commodities hit all-time cycle lows, is a more structurally healthy bullish set up than most other commodities. Gold and silver tend to be the popular way to express a bullish view on inflation, but during times when bond yields are rising with inflation, consumer and industrial commodities tend to outperform the precious metals.
ICEUS:OJ1!Long
by Ludwig_Von_Mises
4
Two options for Crude OilFollowing positive Vaccine news on Monday, investors are already buying into reflation trade ideas. This implies that it won't be long till the global economy bounces back once vaccine distribution starts next year. However, we are still far from having an approved vaccine. Therefore, US Oil has two narratives to go buy. Vaccine approval happens sometime next month and distribution starts next year. This implies that economic activity will recover fully. This is bullish case for oil. Global Oil supply is still high with OPEC members still trying to control oil supply as countries in the northern hemisphere head into winter with further pandemic-induced lockdowns reducing the demand. This is a bearish case for a minor correction. In the long run, I'll be looking to buy oil for a recovery to the $51-$55 level.
TVC:USOIL
by GrizzlyBearBee
Reflation??? Hmmm.... Looks like the crowded bond short consensus/reflation trade is about to get smacked... Positions in stock and options between $TLH and $TLT. Extreme positioning usually does not end well for the herd. I wonder if people shorting when market rate for 10-Years was above 2.31% ever even knew that rates have been under pressure since peaking over 3 decades ago.... Nevertheless rates can end the constant multi-decade state of decline, but my bias still remains to rates breaking the 2.31% support. TLH: Long Positioning TLT: Neutral Positioning
AMEX:TLHLong
by Daniel.B
1
Financials will benefit if the reflation theme continuesRelated to the reflation theme described in my view "Crude Oil: The Most Important Chart in the World". This trade relates to a steepening of the US yield curve as rates adjust upwards through either rising inflation or a pickup in US growth (or both) having been driven to a record low in June. BKX Index (candles) BKX / SPX (blue) US10Y (grey) What is interesting to note from a technical perspective is that the BKX index traded within 1% of the 2007 - 2009 61.8% retracement level last July, before bottoming at the 38.2% retracement level in February this year. Since then, yields have continued to fall (grey), but the relative performance of banks versus the S&P 500 (blue) has held firmer and failed to make new lows. Assuming the reflation theme transpires, banks represent a compelling value play and remain an uncrowded US equity play. Now trading below the $70 level, technically the banks are in the lower half of the last 12 month's trading range and provide a decent payoff in the run up to $80 (61.8% level) with a stop-on-close (weekly) below $57 (38.2%). For further insight and discussion please contact me via Tradingview or LinkedIn , on Twitter @James_LVDTA, and visit www.lexvandam.com to become a member of our Trading Club.
BLong
by JamesHelliwell
TWTR: Potential exploding pattern spottedTwitter has a very interesting chart pattern here. We have evidence of large positions being accumulated, and of possible shakeouts taking place in this zone. Currently, price sits above the volume mode, as you can see in the profile graph to the right, and has seen great climactic volume action in a downbar yesterday, while today went straight up from the mode. I entered a long position today, before the close, and I'll be looking to add to it if it evolves positively. Stop loss can be quite tight, look to buy tomorrow, and use a stop 1-3 ATR below. Good luck if taking this trade. Cheers, Ivan Labrie P.S.: feel free to contact me if interested in obtaining trading signals or tutoring. See my profile for details.
NYSE:TWTRLong
by IvanLabrie
1