Is It Time For Inflationary Trades To Take Off?

precious metals investment analysis gold silver price chart

Monday, we talked about watching High Yield Corporate Bonds (JNK) and 20+ Year Treasury bonds (TLT) ETF as risk-on or off indicator. 

With risky JNK moving lower and TLT pushing higher this gave us more caution for trading on Tuesday. 

It turns out being cautious was the right side to take as the four major indices including the Down Jones, S&P 500, Russell 2000, and the Nasdaq 100 took a morning dive. 

However, much of the trading day was spent drifting sideways or slightly lower.

While the small selloff points to normal market digestion after a hasty run to highs, the media continues to add overhead pressure with its focus on increasing consumer prices. 

Therefore, we should look at more inflationary plays; for instance, precious metals and food if the market begins to struggle at its current levels. 

When it comes to precious metals, we like to watch the Gold (GLD) and Silver (SLV) ETFs. 

Both have been trending higher recently with GLD sitting near resistance around $171.55 as seen in the above chart. On other hand, SLV has resistance at $23.04. 

Since both are close to resistance anyone looking for a trade entry can watch for a breakout past these pivotal price levels. Also, when trading these ETFs it helps to give them room and not attempt to trade them tightly since they tend to gap around at times. 

When looking at the agriculture sector, Invesco DB Agricultural Fund (DBA) is a great way to capture the space.

However, it should be noted that DBA has major resistance to clear around $19.48.

Before DBA can take off, it will need to clear and HOLD over this price area. 

Therefore, as the week continues to unfold, keep an eye for potential trade setups if the market struggles to build back bullish momentum.

Stock Market ETFs Trading Analysis & Summary:

S&P 500 (SPY) 465 is minor price support.

Russell 2000 (IWM) 237-240 is price support area.

Dow Jones Industrials (DIA) 360 is price support area.

Nasdaq 100 (QQQ) 393.92 is minor price support.

KRE (Regional Banks) 72.90 is price support area.

SMH (Semiconductors) 294 is minor price support.

IYT (Transportation) 274 is price support.

IBB (Biotechnology) 153.38 is main price support. 

XRT (Retail) 100 is minor price support.

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.

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