Is Inflation Making a Comeback? The Seven Day Scope (Snipers Only)

"I never hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock. In a bear market, all stocks go down, and in a bull market, they go up."

Is inflation coming back?

The latest inflation data from the Federal Reserve's preferred measure, the core personal consumption expenditures price index, has raised concerns about the ongoing struggle to manage the cost of living. In January, prices surged by 0.4% on a monthly basis, a notable increase from the 0.1% seen in December. This uptick aligns with expectations but underscores the persistent challenge of curbing inflation.

On an annual basis, the core PCE index climbed by 2.8% in January, marking a slight deceleration from December's 2.9%. However, this apparent slowdown is largely attributed to comparisons with the higher inflation rates observed in 2023. Despite the moderation in annual inflation, the monthly figures suggest a continued upward trend in the cost of goods and services.

The recent inflation figures echo the findings of January's consumer price index, which also indicated a rise in the pace of inflation. Although the two measures employ slightly different methodologies, they both point to a resurgence in inflationary pressures. This underscores the ongoing challenge for policymakers in managing inflation while ensuring economic stability.

So why do I always talk about… watching the actual market?

https://youtube.com/shorts/OHoX_8ql-BQ?si=sx4J8qdnKqn4HNHD

When you see what commodities are doing compared to the lagging data of Core PCE (it is about to be march 1st and we are getting data from January). This is normal. We will always get lagging data as long as we are looking at… lagging data.

The CRB index has put in a higher low as well as a band squeeze. It is also very close to getting a monthly golden cross signal. The index has not seen one since 2003 and oil went from roughly 25 dollars all the way to 150 dollars in the 2000s.

I am not making some outlandish call saying that oil will double here. I am saying what I always try to say as a trader. Not a marketer, not an analyst. I am saying that the probabilities are on our side.

Look, Everyone absolutely hates this trade. Really. People have literally gotten kicked in the junk by this trade over and over again. Really for the last 42423423 years. You have to understand that commodities are extremely cyclical. Because of this, there are significant draw downs. Much deeper than equity drawdowns. There are parts in history where certain commodities have seen 80% drawdowns in a bull market cycle. How insane is that?

Commodities are trading vehicles. Plain and simple. You have seen us become very tactical in the last 2 years about which commodities we are willing to buy. However, this is the first time I have started to see buy signals in just about every sector of the commodity market besides grains. Combine that with significant buying form commercials, producers and a possible move lower in the US dollar. Oh and what if they actually start to ease on rates.

This is the case for higher commodity prices. The macro of this situation is pulling me in so many different directions that my brain is kind of stuck on this.

Crude oil is closing above the level Ian and I pointed out in our last video. Here

Copper would start really moving if we can see a close above 3.91 on the front month contract. Honestly, this is the one that would confirm our reflationary thesis. Almost everything else is headed that direction.

Lumber would be the other one.

Lumber stands as a pivotal component of the economy, wielding significant influence across various sectors. As a fundamental material in construction, it plays a vital role in residential, commercial, and infrastructure projects, underpinning the housing market's health and broader economic activity. If both of these break out. You will see our signals start plowing us in to the reflationary thesis.

On a one month time frame the reflationary sectors are leading the way.

Countries that benefit from stronger commodity prices are also doing incredibly well here. This month will tell us everything we need to know. Really over everything what I would like to see is a broad pull back. Then I want to see where relative strength is heading. My thought is that it will be in to all the areas that we just pointed out here.

One last thing. I am so happy to see that so many people have taken our swing and long term trade advice and own bitcoin. This is the reason why we hunt for outliers. The seven day scope hits another one right between the eyes. Great job guys!

Stay informed. Stay resilient. Against all odds.

Warm regards, Jason Perz

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jperz1985@icloud.com