Finding a signal through the noise
The only certainty is uncertainty
For market participants looking to make some clear discernments this month, the only clear distinction is that this has become a picker’s market. Although Bonds, the S&P 500, and the Nasdaq all retraced during the month of February, there were some gems in the rough for the studious investor to benefit from.
Bitcoin, Ethereum, and a host of top ten cryptocurrencies all saw emphatic price action in February. After a depressing 2022, crypto is now a leading asset class this year and seems to be only pausing after a scorching rally. Significant overhead price resistance has paused this most recent rally, but for trend-followers, breakout investors, and the like, cryptocurrencies may and possibly should be on the radar for institutions and retail traders.
Bonds, which have recently even garnered some uncommon media coverage, pulled back in unison with the broad market, although seemingly more bearishly. Bonds have received increased interest after suffering through a historically abysmal 2022 calendar year. Bonds, which move inversely to interest rates, are anticipated to fall even further as the Federal Funds Rate increases, which is expected to occur at the next Federal Open Market Committee. But at some point the monetary tightening will stop; will bonds bottom coincidentally, lag, or lead interest rates? For investors looking for a little less volatility and diversification, Bonds deserve a look in my honest opinion.
My favorite trade on the sheet this month: Natural Gas.
Commodities, which are a much under-talked-about and “boring” asset class, follow the same technical characteristics and have elevated fundamental implications similar to any asset class.
Intermarket relationships and the rotation between stocks, commodities, bonds, and cryptocurrencies can bring true diversification to the astute investor. Commodities, similar to bonds, have significantly more relevance than even the most capitalized stock, as you can go a lot longer without a particular brand, say Starbucks than you can in the actual commodity, coffee. The world can still operate without publicly traded stocks, but gas, cattle, soy, and the rest of the asset class are legitimate resources that civilizations are designed to require; there just is no GDP without natural resources. How can we benefit from this?
Natural Gas is definitely not for the weak. Even fundamental factors such as a blistery winter, and a war with Russia and Ukraine haven’t been enough to support the fall to lower lows. February, however, traced out a bullish Japanese candlestick known as a hammer, signaling that a bottom may be in. After a strong last week and the beginning of March, Natural Gas appears to be the best trade on the sheet that may have breakout buyers and trend followers attention if the near-term trend continues. Two tickers that I like to gain exposure in natural gas are UNG United States Natural Gas and BOIL.
For market participants looking to make some clear discernments this month, the only clear distinction is that this has become a picker’s market. Although Bonds, the S&P 500, and the Nasdaq all retraced during the month of February, there were some gems in the rough for the studious investor to benefit from.
Bitcoin, Ethereum, and a host of top ten cryptocurrencies all saw emphatic price action in February. After a depressing 2022, crypto is now a leading asset class this year and seems to be only pausing after a scorching rally. Significant overhead price resistance has paused this most recent rally, but for trend-followers, breakout investors, and the like, cryptocurrencies may and possibly should be on the radar for institutions and retail traders.
Bonds, which have recently even garnered some uncommon media coverage, pulled back in unison with the broad market, although seemingly more bearishly. Bonds have received increased interest after suffering through a historically abysmal 2022 calendar year. Bonds, which move inversely to interest rates, are anticipated to fall even further as the Federal Funds Rate increases, which is expected to occur at the next Federal Open Market Committee. But at some point the monetary tightening will stop; will bonds bottom coincidentally, lag, or lead interest rates? For investors looking for a little less volatility and diversification, Bonds deserve a look in my honest opinion.
My favorite trade on the sheet this month: Natural Gas.
Commodities, which are a much under-talked-about and “boring” asset class, follow the same technical characteristics and have elevated fundamental implications similar to any asset class.
Intermarket relationships and the rotation between stocks, commodities, bonds, and cryptocurrencies can bring true diversification to the astute investor. Commodities, similar to bonds, have significantly more relevance than even the most capitalized stock, as you can go a lot longer without a particular brand, say Starbucks than you can in the actual commodity, coffee. The world can still operate without publicly traded stocks, but gas, cattle, soy, and the rest of the asset class are legitimate resources that civilizations are designed to require; there just is no GDP without natural resources. How can we benefit from this?
Natural Gas is definitely not for the weak. Even fundamental factors such as a blistery winter, and a war with Russia and Ukraine haven’t been enough to support the fall to lower lows. February, however, traced out a bullish Japanese candlestick known as a hammer, signaling that a bottom may be in. After a strong last week and the beginning of March, Natural Gas appears to be the best trade on the sheet that may have breakout buyers and trend followers attention if the near-term trend continues. Two tickers that I like to gain exposure in natural gas are UNG United States Natural Gas and BOIL.
Leave a comment