Stocks exploded higher on Friday when it was reported the US unexpectedly ADDED 2.5 million jobs in May (estimates were anticipating a LOSS of eight million).
The market blasted through resistance (red line) and is now within 6% of new all-time highs. The question is whether we get a consolidation now, or if traders push stock to “close the gap” just above current levels at 3,270 (blue rectangle in the chart below) this week.
Those are near-term considerations for those of you who are looking for short-term plays. In the bigger picture, the issue to consider is the breakdown in Treasuries.
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The long-term US Treasury ETF (TLT) has broken below support (green line) in an aggressive drop. There isn’t a whole lot of support until we get to the bull market trendline (blue line).
More and more this is beginning to look like a kind of mini-crash in bonds. Are bonds beginning to discount a much higher rate of inflation in the US? Gold is certainly suggesting this could be the case. The precious metal has broken out in every major currency ($USD, Euro, Yen and Franc).
On that note, we just published a Special Investment Report concerning FIVE contrarian investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU through care investing in the precious metals sector and precious metals mining.
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Chief Market Strategist
Phoenix Capital Research