Make no mistake – the current surge across numerous U.S. asset classes has very little to dow with good old fashioned value generation and is simply a natural response to the systematic destruction of the U.S. Dollar. It’s also part of a narrative that strangely seems to be favored by both sides of the political isle – for different reasons. In other words, rapid loss of confidence in the greenback is pushing asset holders into whatever tangible they can get their hands on.

The goldbugs finally have their day in the sun after years of roasting in sideways purgatory. As you may recall the subs and I caught an almost perfect entry near GC 1740 and managed to get out around the 2k mark.

Do I regret cutting the cord there? Hell no – as the old saying goes: Bulls make money, bears lose money, and pigs get slaughtered. Alright, yes – I did modify that expression somewhat 😉

The chart above shows the SPX divided by the price of gold in comparison with just the SPX. Apparently gold is even outpacing equities at this point and that ought to make the gold bugs very happy.

Of course there’s one glaring problem with all that almost nobody seem to understand. At the end of the day – at some point in the future – you’ll have to make a payment to somebody. And odds have it that the other party won’t be accepting your gold bullions or your fancy American Eagle or Canadian Maple Leaf. Remember we all live in a digital economy now.

What they’ll ask for will be U.S. Dollars and guess what – massive inflation in Dollars causes prices to rise. So while our gold assets are on the rise, so are prices across the board.

Mrs. Evil keeps complaining about the literal doubling of food prices over here in Spain – at least when it comes to organic food. Those are in Euros by the way, so multiply this by 1.20 – a kilo is about 2.2 lbs. So that comes out to about $6 per pound for those kiwis. Insane….

I guess if you’re fine with chowing down Soylent Green you’ll still be able to find a bargain.

Silver had been lagging gold for a very long time but is now catching up quickly. To put things into context – silver has more than doubled over the course of the past six months.

But here’s something even more interesting:

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Silver has been even outpacing gold over the past few weeks. I regret not catching a piece of that action but first up you can’t catch them all and second it’s better wishing to be in a trade than wishing to be out of one.

I do however think that that this trade is getting a bit crowded, which brings me to our current asset-non-grata:

The Dollar does not seem to be able to find a floor recently and the current retest has very good odds of failing as well. However, that said – since this massive sell off started we have not once seen a proper spike low followed by a retest, which makes this one the best entry opportunity we’ve seen in a long time.

The odds may be low but the reward to risk ratio is very high. What we have going for ourselves is a very clearly defined ‘you are wrong’ mark which officially begins at the recent spike low but I have extended it a bit lower to 92.4 as crossovers happen.

Which of course means I have decided to grab a small exploratory long entry here with an ISL set at < 92.4. Again, this is an early entry that is most likely going to fail. Should it not then I plan to increase my exposure on the way up until I reach a 1R position.

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I almost forgot – if you grabbed a long position in any of the big tech symbols I was pimping a week ago then good for you but it’s time to starting tightening your trailing stops. Don’t get greedy and live to trade for another day.