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Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.

Just like being long INFLATION via Commodities, as an Asset Class (since June), it’s Down Dollar #Greenlights:

  1. CRB Commodities Index (19 Commodities) inflated another +1.4% last week to a new Cycle High
  2. Oil (WTI) inflated another +0.6% last week, inflating +8.5% in the last month = Bullish #Quad2 TREND
  3. Corn inflated +7.3% last week taking its 1-month inflation to +15.0% (and is up another +2.5% this AM)

But ask the guy living in McConaughey’s Dad’s old Texas trailer if there’s food inflation… I dare you to tell whoever answers the screen door that the Feds said there’s no real-world inflation #accelerating (you might want to bring a gun).

For those of you who can’t afford $22 sushi rolls for dinner, eat some inflating Soybeans, and like it. They inflated another +3.7% (in Devalued Dollars) last week and have inflated +12.7% in the last month alone.

Oh, you have Old Wall friends who don’t want to talk about that real-world stuff, eh?

The biggest Asset Allocation mistake you can make either this morning or throughout Global #Quad2 is being long Duration (and/or Deflation). With Treasury Bond Volatility (MOVE Index) moving +16% higher last week, the Long Bond is still headed lower.

Do you need Old Wall Economists and the Fed to tell you there’s inflation before it runs away from you performance wise? Heck, even the beloved “Break Even” on the UST 10yr Yield is up +16 basis points in the last month to 1.99%.

Write that down. And don’t forget that it’s the numbers that drive Wall Street’s future narratives, not the other way around.

CHART OF THE DAY: Understanding #Quad2 | FX & Commodities  - 111