Is there a rotation into the basic materials? Is the inflation trade just in the very early stages?
All of the talk is about the disappointments in the economic growth.
"Gold is predicting deflation"
"Look at iron and steel" Down.
China is slowing......
But it may be that the end to the safety/deflation/austerity trade is coming to an end.
The recent flip-flop by Goldman Sucks may be just the type of misdirection that is a tip-off to the change in outlook of the big players. And they may be late to the game.
I think I see a rotation into the metals, mining, and basic cyclical stocks that signals the start of a real inflation trade.
Time will tell of course. But we have had a long decline in the basic materials on the slowing of Europe, China, and the "emerging markets".
With the recent collapse in the gold price there may be that capitulation that is necessary for the really large players to change their stance.
It seems that the volume in some of the markets is indicative of a bottom....
Here are some charts with notations...
Any decisions you make are your own!
It is early. And I may be the victim of wishful thinking/trading.....'
But it seems to be the start of something.