Inflation or Deflation?

Is the latest stimulus bill inflationary or deflationary?

For those adhering to the tenets of Wyckoff analysis (as this site does), you already know it’s sort of a trick question.

The answer is: It doesn’t matter.

Maybe a better way to put it, it’s the wrong question.

The right question is: What’s the market saying about itself?

The market itself will decide (or reveal) the next probable direction.

Before we get to the charts; remember, one objective for the (U.S.) markets and political kabuki theater is, destroy the middle class.

Exactly how that’s going to happen in the final act is unknown.

Perhaps it’ll be illegal to go to the bullion dealer (or the grocer) without proof of protection (injection). Problem solved.

That destruction remains the backdrop; the macro for the analysis.

Moving on to the charts:

Real estate remains in a terminating wedge. Last week’s action had IYR contact the lower wedge boundary and then retrace into the close.

Weekly volume was the highest since the week of March 13th, 2020, almost exactly one year ago.

So, we see the ‘face ripping’ Friday rally, ‘plunge protection team‘ action, had no material effect on the chart’s technical message.

Looking at it a different way, there’s also an axis line in play.

Market oscillations about axis lines are completely normal.

We’ll see if Monday’s action is ‘buy the rumor, sell the news’. We’ve already had buy the rumor (stimulus) with Friday’s rally.

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.

What’s For Dinner?

According to this report from ice age farmer, it’s trash and bugs.

While the sleight of hand is taking place in the political arena, the distraction allows (without notice) some fast food outlets to put garbage, literally, in their food.

Eating real food on a go-forward basis, is going to cost. 

If huge numbers of the population are on government assistance, they’ll take whatever they’re given.

According to the link above, that ‘given’, will likely be ‘up-cycled’ food which is trash, garbage, along with ‘insect’ protein.

Those accessing these updates, just by repetition are (or already) getting the picture.  There’s a lot more going on than just the markets.

It’s the markets though, that gives us a way (at least for now), to circumvent the cost required to separate from the herd.

Prior updates have discussed the food supply and specifically, corn. 

One of those highlighted an area in CORN, that would present an opportunity.

With new restrictions coming or already in place, it’s likely that restaurant dining will take another hit.  Winter’s rapidly on the horizon and outside dining will be eliminated for months to come.

Conversely, demand for restaurant ingredients will be affected which in turn, could affect the commodities markets … at least temporarily.

That brings us to CORN.

Even though the CORN fund is an amalgamation of three futures contracts, it’s interesting that it still adheres to classical analysis. 

We can see the measured move from the wedge breakout and the retrace back to resistance.

It’s what happens next that’s important.

Restaurant demand could collapse again; driving CORN lower. 

If so, and we get below the support area (creating a spring, reversal,  condition), it could be the last time … ever, we see these prices.

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.