June’s consumer price index (CPI) inflation rate was reported at 9.1%, setting another multi-decade high.
It looks to me like inflation is here to stay, and those who keep telling you it’s “transitory” are merely trying to make you feel better about the fact that everything you buy now costs more!
Don’t believe me? Here’s a little anecdote that might change your mind…
I was on the phone with a good friend of mine just yesterday morning. He’s in the restaurant and catering business.
Aside from the fact that he can’t find any new help or afford to pay his current help the wages they want, he has a much bigger problem…
Costs Out of Control
You see, the cost of the products he needs to fulfill his menu offerings have well exceeded what they once were not that long ago.
This is why when you walk into many eateries these days, there’s a sign hanging that states something like, “Menu prices are subject to change without notice.”
Take chicken, for example…
Not long ago, you could buy an entire case of boneless, skinless chicken breast, which is the most popular when it comes to mainstream eatery usage, for less than $70 a case.
At one point, the price of that same case went up nearly five-fold.
It’s settled a little bit, but that still doesn’t make the pain and suffering any less for the guys and gals just trying to earn a living making sandwiches.
Increases in the cost of gasoline and refined petroleum products certainly contributed to the inflation we’re seeing.
But the price of a barrel of oil is now starting to decline due to the surge in the US Dollar Index.
Oil is priced in dollars, so a stronger dollar generally means lower oil prices, all else being equal. Take a look at the US Dollar Index for yourself in the weekly chart below…
With that in mind, WTI crude oil tested the 200-day simple moving average (SMA) last week, and price is testing it again this week.
We’re anxiously awaiting to see how price action reacts to this week’s settlement. It should be very telling for what we’ll be expecting next for the energy sector…
Fighting Back
Now, to fight back against the inflation we’re seeing throughout the economy, I offer a premium trading service called The Speciale Report, in which I articulate opportunities within this market.
These opportunities can be long-term or short-term in nature, and we look for ideas on both the long and the short side.
We employ futures, ETFs and options to take advantage of these opportunities, so the service is very fitting for all types of traders with all levels of risk tolerance.
Based on what I see with this week’s price action thus far, we are likely to see an opportunity teed up by the end of the week.
Rules to Live By
“Do not save what is left after spending; instead spend what is left after saving.” Warren Buffett
Until next time, I wish you a beautiful and blessed day!
Yours In Trading Success,
Anthony Speciale Jr.
