Energy and the Global Energy Crisis has been a hot topic of ours lately… Although we’re going to shift gears a little, our free commodity inflation trade for November 2021 still falls in line. But we can’t get to that without discussing inflation.
Following Federal Reserve Chair Jerome Powell’s remarks Wednesday, “taper” is clearly the word of the day.
This time around, however, it was not immediately followed by the word “tantrum.”
Instead of plummeting like they did in 2013, the Information Technology and Materials sectors led markets higher, sending the dollar lower in the process.
The most interesting remark to me was how Powell said the central bank was going to be patient with interest rate hikes, but that it was also “ready to pounce” on inflation.
Behold, my face right now…
Source: Paramount Pictures, The Interwebs
Literally every commodity except iron ore has risen significantly in price over the past year…
Source: Bloomberg
And frankly, even iron ore doubled at one point before pulling back.
A Commodity Inflation Trade for November 2021
At any rate, “ready to pounce” is just another way of saying “we’re not doing anything right now.”
For us, that means we want to be long commodity inflation in November 2021 — particularly on the energy side as we head into winter.
On that note, if you picked up some Consol Energy Inc. (NYSE: CEIX) Tuesday — or Arch Resources Inc. (NYSE: ARCH) Wednesday morning — well done. You have earned the right to sell a little here and rotate that capital into one of our watchlist members that’s down.
And that FREE TRADE is copper producer Freeport-McMoran Inc. (NYSE: FCX), which is consolidating here and looks ready to break out.
Source: Bloomberg
You know the drill… Sell on green so we can buy on red.
Go get ’em.
All the best,
Matt Warder
Fortune Research
