As the war in Europe wages on and the market continues to trade in a highly volatile, extremely choppy manner, it can be hard to picture equities rising in such an environment. Yet over the past 100 years, markets have consistently risen – albeit with some twists and turns along the way – once the foretold war or invasion begins. However, the headline-driven nature of such a time makes holding stocks difficult for most investors. We have received numerous emails from members panicking about the difficulty markets have had gaining traction. Negative headlines have largely prevailed for the past week, but especially considering the massive short position currently hedging the Russia-Ukraine conflict, significant short-covering will be seen on any piece of tangible, positive news.
Presently, the major indexes are below their key moving averages, each of which presents a level of resistance on the impending move upwards. The VIX has also advanced slowly and steadily – a rare occurrence – and should shortly plummet back down to reset at the key 20 level. This past week saw the release of tremendous economic data nearly across the board with Non-farm payrolls, Jobless claims, ADP employment, ISM manufacturing, and Construction spending all beating estimates. This coming week, all eyes are once again on inflation as investors will eagerly await Thursday’s CPI numbers and Friday’s Five-year inflation expectation number.
In our last Weekly Briefing, we also covered numerous commodities we expect to experience tremendous upside and overall volatility over the coming months. Crude, natural gas, wheat, palladium, and uranium have all continued to rise significantly, and we have already successfully executed trades in most of these commodities over the past few months. We may re-enter many of these commodities shortly for our Gold Members, who will be apprised of such in our Nightly Briefings. To give our Gold Membership a try, please click the following link: www.theforecast.co/gold-member-sign-up.