Inflation … Hot or Not ?

Monetary Does Not Equal Asset

If there ever was a CPI report to completely break the ‘inflation’ narrative, this was it.

Several articles, here, here, and here, all saying essentially the same thing … skyrocketing ‘inflation’.

If that really was true, why is the 5,000-year-old hedge against inflation (gold) not responding … and even worse, heading lower?

That’s because, it’s all rigged, man !! (cue, Tommy Chong).

Well, it has always been rigged.

Both Wyckoff and Livermore talked about that ‘rigging’ way back in 1921, when Wyckoff interviewed Livermore about his trading methods. Later, in 1922, a series of articles on Livermore was published in Wyckoff’s ‘Magazine of Wall Street’ (a forerunner to Barron’s).

The point is, we’re not interested in who is doing the rigging. That’s what the press tries to find out (a waste of time). The real question is, what are those ‘rigging’ trying to accomplish?

Answer that, and you may have a potential trade set-up.

We’ve got supply chain, controlled-demolition with corresponding asset price inflation; the kicker is, gold and the dollar, say we’re in some kind of monetary deflation.

Senior Miners, GDX Confirming Trend

Price action in the gold market and the miners confirm that (deflation) assessment … for now.

Zoom-in on trend line contacts.

Summary

Based on the articles linked above, if there ever was a data-set release that would launch gold (and the miners) higher, today would be the day … right?

Both Wyckoff and Livermore did not concern themselves with what ‘should’ be happening. They were focused on what ‘is’ happening.

Gold and the miners are (and have been) moving lower.

As yesterday’s post said, we’ll remain short (not advice, not a recommendation) until the market itself says to exit.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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