Surging Commodities Pose a New Threat to Inflation
2025.01.27 03:14
I am all about the following price this year more than ever.
In fact, I will go so far as to say, the credo should be first price then narrative-again this year more than ever.
This concept is also more important than ever on the notion of , disinflation, deflation or reflation.
What will the do? What will Trump’s policies lead to? What if and so forth and so on?
Just watch the key commodities and that will tell you how and when the narrative changes.
In the past I wrote that folks are looking for inflation in all the wrong places.
This year I am changing that slogan as inflation will not be so readily disguised.
It could be hiding in plain sight.
Let’s look.
Just for the fun of it, and to emphasize that Mother Nature has the last word, look at the coffee chart. are on new all-time highs. 
Using the calendar ranges, also has made yet another breakout from the January calendar range high and is inches from making a new all-time high. 
has yet to outperform gold.
But I am willing to go out on a limb and say that if futures breakout over $32 and ounce and the ETF takes out the January high (depicted with the horizontal green ling), be prepared. 
You will see how quickly the narrative on inflation shifts if silver begins to outperform as we predict.
The same is true for my favorite narrative changer, .
This is the spot futures for Sugar. The January calendar range high is 19.94 so we are not there yet.
But the reversal from the massive support level is impressive.
The momentum is improving.
Sugar is key. Watch it.
For those playing along and reading the Daily, you know I did a piece on corn futures right at their lows of the year.
To see the whole agricultural and soft commodities picture, the ETF is reliable.
DBA cleared the January calendar range last week. That is bullish.
It filled the gap from December 19th. That is bullish.
A move over 28.00 will blow the doors off of inflation and in the worst possible way-food prices.
You think the narrative will change then?
And what will the President and Chairman of the Fed do about it?
I left out a lot of commodities for brevity’s sake.
However, I would continue to watch , , , and livestock, which also just made a huge run higher.
ETF Summary
(Pivotal means short-term bullish above that level and bearish below)
- S&P 500 (SPY) 599.70 major support after the new All-time highs
- Russell 2000 (IWM) 227 now must hold
- Dow (DIA) 436 support
- Nasdaq (QQQ) 528 the calendar range high cleared now must hold
- Regional banks (KRE) A move over 64.25 better
- Semiconductors (SMH) 260 now support as this takes the lead in the Family-again
- Transportation (IYT) 71.16 important to hold
- Biotechnology (IBB) 137 key to clear for a further rally
- Retail (XRT) 81 must clear 78 must hold
- iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.40 the calendar range support
