The big inflation protected mutual funds (American, TRowe, Vanguard, and Fidelity) are all sending classic technical signals of an impending breakout! This means that the inflation premium is increasing, and given the technical pattern emerging, we feel that the inflation premium is about to increase dramatically over the coming days.
So what is the implication of the inflation premium? A rising inflation premium translates to an expectation of higher inflation down the line……which in plain english = high commodity prices. Notice how the charts above look remarkably similar to the CRB Index, Crude Oil, the Aussie Yen, and now Gold in Aussie dollar terms. Also take careful note of how each and every chart is confirming each other and how “desperately” close the charts are to breaking their resistance lines. Yes a powerful breakout appears imminent!
But wait there is more……take a look also at how similar the shipping ETF SEA is to the charts above!
To say that the stars are aligned is a complete understatement.
