On Sunday I did a video saying not to go by predictions for the market this year, but to focus on the underlying trends and expect them to continue until they prove otherwise. Tuesday proved how key this is as the ARKK ETF traded down, bonds fell as yields went up, and commodities went up again across the board. The XLE energy stock ETF hit a new high.
What to watch now are bonds. Take a look at the TLT ETF.
TLT goes down when 20-year Treasury bond yields go up and has slid down to start this year down towards its October low.
High energy prices and commodity prices mean inflation and that means higher yields.
Gold went up too on Tuesday and if this underlying trend of inflation continues more people will flock to it, even if the masses have been ignoring as they have been fully invested in the fad stocks. Once they get out of their losing positions they will buy what they see going up.
If you missed the Sunday video I did watch it here.
-Mike
