This is my view which is not necessarily true, but it is something to think about. Indices making all-time highs, equities are beyond reasonable valuation of actual value. Pumped up by fiscal stimulus and more stimulus programs and spreading false hopes.
The cryptos are bubbling higher by the day. Volatile moves of 5-10 % daily are becoming common practice.
So, what is still trading in an actual, non-overextended inflated price pattern?
We think that is the energy and the grains sector.
True that we saw crude trade below zero last year, which we forecasted as such but in disbelief that it would fall that low. However, looking at current trading level and ranges it seems to have recovered from that technical washout as I like to call it.
Nat Gas is another example it trades separate from the media hype and traded in a logic a technical way. We have had some very nice trades in Nat Gas in the last twelve month and so too in Crude.
Obviously, the grains saw a huge Increase due to its high demand from China and a declining global supply of grain. This pushed corn and soybean prices to unexpected levels. We covered the grains multiple times in the chart of the day, as we still expect to see a significant correction. Here too we generated very nice profits in the Grains which was pure based on the overall technical models that we use.
It is a debate if you want to believe in technical analysis. Facts are that under normal circumstances they work well. The last twelve months we have seen that most sectors worked well based on the technical models. A few others that influenced the media hypes, and promising stimulus programs, and the unexpected pandemic rerailed the models slightly/ However, we do see – and wrote about it many times in our GMTT Research Reports – that they do fall back into its technical model. This can be a matter of days or a couple of weeks.
So, what to expect next must be coming up as your question. That will be revealed in our three weekly GMTT research report which after signing up gives you a 14 free day trial. Only after the 14-day free trial will you get charged and its free to cancel at any moment.
You will get many trading opportunities and even if you are not a trader it will give you a feel at which direction the market is heading. Jitschak Nager GMTT