What The Winners Are Saying

“Winners make a habit of manufacturing their own positive expectations in advance of the event.” -- Brian Tracy

Much of my posts, here on Investing.com of late, have focused on Silver (SLV), Spain (EWP) and the reflation trade as a reason to believe in the Summer Surprise of higher highs.

The Message Of Price
As I noted on CNBC last week, the cyclical-growth trade appears to be strengthening as dividend heavy/low beta sectors (“dividendsanity”) break in favor of risk-taking. I think what many are missing about this broader move higher in risk assets is the message of price based on what has performed particularly well in the last month.

That said, every now and then I run a screen on my list of over 1000 ETFs/ETNs for those areas of the investable landscape that are furthest away from their respective 20-day (one trading month) moving averages. I do this to identify if a certain theme is pulsing through money allocation toward risk.

Listen To The Metals
I think the list is actually quite telling about market movement in the past rolling month. As chatter has grown over Fed policy action and bond yield targeting by the European Central Bank, the winners uniformly have been in the precious metals space, with Gold Miners (GDX), Silver Miners (SIL) and Silver itself (SLV) staging very strong gains. Homebuilders (XHB) also continue to defy the skeptics by continuing their vertical leadership since the October 3 low of last year as housing stabilizes in the U.S.

Talking Inflation
What's the message here? Inflation expectations are rising given what appears to likely be a moment of global shock and awe in terms of Fed, ECB and potential PBOC stimulus to come. The momentum appears strong and early in the metals, energy and homebuilders trade, which means inflation expectations may have quite a bit further to run.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.