Inflation Fears Mount
Welcome back to the Rude Awakening, folks.
Over the last ten days, we have shared a series on my favorite method of profiting in the markets, asymmetric trading.
In your real-world results video from Friday, I showed you how this approach worked over the course of one month. Click here for a refresher on that one.
In it, we showed you how to make overall wins, we only need to be successful in 25% of our trades!
Now, today, in a much longer video than usual, we’ll go into detail about how to manually set up and execute the asymmetric trading approach.
Today’s video goes through the manual way to run this system. Coming soon, I will give you the opportunity to join a program I am creating outside of Paradigm Press. More on that later, but…
There has never been a better time to get started with this system.
And it’s because of the wild swings like we keep seeing even in a bull market…
“Stocks fall as yields rise, inflation concerns mount”
Yahoo Finance reports…
Stocks fell Monday while commodity prices rallied, as rising Treasury yields and expectations of higher inflation weighed on equity prices.
The S&P 500 dipped about 0.8% shortly after the opening bell, and the index was on track to add to last week’s losses. The Dow shed more than 150 points, or 0.6%. The Nasdaq sharply underperformed, dropping 1.3% in early trading as tech shares came under more pressure.
Some commodity prices performed more strongly, however. U.S. West Texas intermediate crude oil futures (CL=F) and Brent crude futures (BZ=F) both jumped after Goldman Sachs strategists said in a note Monday that they expected Brent prices to reach $70 in the second quarter and $75 in the third quarter this year amid rising demand. WTI crude oil has already gained 23% this year and exceeded prices from the same time last year.
Prospects of fast-rising inflation during this year’s expected economic recovery have pushed bond prices lower and yields up sharply. The yield on the benchmark 10-year Treasury note (^TNX) briefly ticked above 1.39% on Monday to reach a fresh one-year high, increasing the specter of higher borrowing costs for companies. Prices of copper jumped above $9,000 per ton on the London Metal Exchange, marking the highest level in nine years as tightening supplies, rising inflation and notions of significant infrastructure programs out of the U.S. and other countries led to expectations of increased demand.
Since strong COVID-19 vaccine efficacy data was first announced in November, traders have been positioning for the likelihood of a strong economic growth later this year, as the vaccine distribution eventually allows more businesses to reopen. As such, many traders have been rotating away from the high-growth tech stocks that led the indexes higher for much of last year. Instead, they have favored more economically sensitive equities and asset classes in anticipation of a post-pandemic recovery.
Like I always tell you, smart traders can take profits in any marketplace.
Our asymmetric trading approach allows us to do just that.
We’ll talk again tomorrow.
Editor, Rude Awakening