Eight days into the new year, and we are off to an explosive start! One bitcoin is worth both of my cars, and interest rates are blasting off. Seriously, what could go wrong? The answer is nothing. Some of our clients have six-figure gains on bitcoin futures, and others have been short treasuries and caught the move on rising interest rates. I have been writing that interest rates will continue to increase until the second quarter of 2021, and at that point, you want to shift into gold. That is the point in the economic cycle where data has peaked, and the rate of change has stalled.
If you know me personally or are a client, one thing you will get is a straight answer and someone who does their research. The research I enjoy most is backtesting how various asset classes perform under different economic models and at different rates of change. I will tell you that gold is not an asset that "outperforms" others in this current environment, and if rates are rising, the price of gold is declining, and energy costs are rising, gold miners will "underperform." Remember, my goal is to give you the best article I can write given the information I have when I write it.
Over the past month, I have laid out some of our "2021 high conviction trades," and since that time, favorable market directions have allowed us to close many of them already, leaving clients with excess cash to deploy.
This upcoming week, we will enter into several new ideas in different commodities i.e., sugar, and design a play to take advantage of the seasonal bottom in silver using call options.
Seasonal Chart of Silver
One way to get your 2021 on track is to register for a free two-week trial of our Morning Express. Here, we provide actionable technicals, fundamentals, market bias, and our proprietary levels for the most actively traded futures and commodity markets, including gold and silver. You can register here: The Blue Line Express Two-Week Free Trial Sign up.
Good luck and good trading,
Chief Market Strategist
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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.