Invest Not in Politics but in Economics

September 15, 2024

Mish's Daily

By Mish Schneider

I enjoy sharing with you, my new and devoted readers, the notes I send out to media producers.

In this case, I share my notes with a follow up of how the main themes played out.

Then, I map out a plan for this coming week.

Notes:

This week saw a historical turnaround in the market-

Buyers remain

Theme is invest not in politics but in economics-where was talk of the debt in the debate? Or spending?

Recession will not be the most likely outcome

Stagflation more possible-economy slowing but not horribly-while inflation could pick up

Fed cuts by 1/4-ECB already started

REITs could be interesting

China cuts-watching that to bottom

Silver and gold flying and have more room

Copper resilient

Oil most likely bottomed

Bitcoin starts a seasonal potential turn up

XRP ETF is huge

Long term still huge fan of alt energy and EVs

Modern Family-Trans has held up ok

Growth and SMH back to leading

Retail on watch XRT over 74 looks like a confirmed double bottom-that will spur some consumer discretionary stocks esp. those based on my vanity trade

Like right now: TAN SSYS BLOK HOOD NVO SLV GDX COPX SLG

How did I do?

The chart at the top is of the ETFs for gold and silver (GLD and SLV).

Futures in gold traded over 2600 while silver futures traded around 31.

To this part of the notes, silver and gold flying and have more room, let’s think.

Debt remains high, government spending will most likely persist, the CPI PPI numbers represent a slice of inflation, but not the whole picture, and the dollar fell.

Add to that, the Fed will most likely cut the rates.

Hence, spending and stimulus are happening as if we were in a deep recession. We are not. This is a slowdown from some overzealousness and thus, both spending and stimulating could be quite inflationary.

Please watch the video below with Schwab Network. Many of the notes were talked about during that interview.

Gold and silver (and miners) look ripe.

Both are outperforming SPY.

What would support a more inflation narrative now, is if silver begins to outperform gold. That is yet to happen.

And as for cryptocurrencies and the Economic Modern Family?

How did I do?

Copper resilient ✔️

Oil most likely bottomed ✔️

Bitcoin starts a seasonal potential turn up ✔️

XRP ETF is huge ✔️

I did pretty good as all manifested this past week.

Let’s look now at 2 predictions from the notes.

Long term still huge fan of alt energy and EVs

Copper looks resilient.

Oil rallied back from the lows to test $70 a barrel.

Bitcoin indeed looks as though it bottomed end the week close to 60k.

XRP will become a trust, which brought buyers into Ripple. And, moving to alt energy…

The chart of TAN, solar ETF, is a prediction more than anything for right now.

TAN seems to have bottomed, taking out the lows from early August this past week and then rallying to close near the highs of the day.

The next day TAN gapped higher and remains in consolidation mode until it clears the 50-DMA.

The momentum has improved.

The TAN: SPY performance is basically on par. TAN is back above the July 6-month calendar range low.

TAN has a lot of upside potential.

How did I do?

Retail on watch XRT over 74 looks like a confirmed double bottom-that will spur some consumer discretionary stocks esp. those based on my vanity trade

Perhaps my boldest call as so many doom and gloomers surfaced about the plight of the consumer while I touted no recession and the vanity trade.

The double bottom depicted by the thimbles is still working itself out.

It looks good; however, we would like to see XRT change phase back to bullish. And we would like to see XRT outperform the SPY while momentum increases.

Nevertheless, XRT is our most promising sector right now and of course, the Granny of the Economic Modern Family.

And there you have it.

Bold, accurate calls, with follow-up, plus areas for you to look at this week.

Educational purposes only, not official trading advice.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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