We are on the verge of an asset blitz. An asset blitz is when a moment of realization strikes a mass audience who have been absolutely oblivious to what has been occurring, forcing them into an emotional reaction that has them chasing stock, commodity and asset prices, in general, with reckless abandon.
With Congress about to approve another round of "spend at Wal-Mart and buy stocks to your heart's content" stimulus, while the Fed will likely disclose ever increasing creative measures to inflate their balance sheet this week, the bid in the market for the remainder of July has potential to get cannibalistic. Investors ripping flesh off one another in an effort not to miss out on another tick.
The parabolic run in gold and silver is telling us of the outcome in equities loud and clear. What has been amazing is how few investors have caught onto this brilliant correlation since the March low. Gold has been telling investors exactly what equities would do with a lead time of 3-5 days for months now.
I'm not sure if the present iteration of Wall Street investor are a group of mouth breathers who have difficulty digesting relevant information, however, this correlation between gold and the S&P should have been taped to the wall of every investor to remind them that the inflationary, "QE until the sun comes up" trade is just getting warmed up, with gold paving the way.
The parabolic run in gold leading to a parabolic run in the S&P that I was discussing in April to take place in Q3/Q4 is arriving just in time.
We added nothing today because we are already leveraged on the long side, with an extreme focus on the best performing tech names with a definitive theme, leveraging the current environment to their favor.
The fun is just getting started at this late date in the month of July.
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