Stop Getting Distracted By Shiny Objects

by Nick Hodge

Last week, I was talking about why we all needed to calm the hell down as we had two 600 point down days in the Dow and people thought a sell-off was coming. 

We also had certain stocks going berserk with the WallStreetBets stuff, like GameStock and AMC and then the silver sector. 

I was saying on Twitter on Monday that I was selling silver stocks.

Because why wouldn't you? 

If you've been sitting on positions for years and you generally rotate and trade in and out of positions — as a professional would — and you get a day with exceedingly high volume and liquidity where silver stocks across the board are up 20%...

Of course you'd take some profits on that. 

And of course you're going to be able to buy back at lower prices when that euphoria wears off. 

And that's exactly what happened.

Stop getting distracted by shiny objects. How old are you?!

But back to the broader markets…

I was saying that when the S&P was breaking down or selling off last week that nothing major had happened. 

The S&P itself hadn't broken downtrend. 

The dollar itself was still in a downtrend, rates were still going up, and volatility, as evidenced by the VIX, hadn't even gotten back to where it was as recently as October 2020. 

And it's been the same old, same old, right? 

You've got Biden and Congress getting close to a new stimulus or relief bill…

You've got Janet Yellen giving the boys and girls on Wall Street talking to, telling them, "How dare you let the VIX spike like that? Assets can only go up.”

You've got the Fed committed to low rates and buying $120 billion of bonds per month.

And all that continues to keep a thumb on the dollar, which is down some 10% since last year — albeit at at a two month high now, but not breaking out of its trend in any way.

So as the dollar continues to deflate, other assets continue to inflate. 

Base metals and the cleantech metals — lithium and copper — are still doing really well. 

Energy is starting to reinflate in general. Time to start looking at some of the bigger oil names. 

Cannabis is doing really well. Not only are those stocks reinflating, but Chuck Schumer is talking about introducing cannabis legislation, and states and the federal government obviously want the taxes and jobs that come along with that. 

So I've been recommending some particular energy names and cannabis names in my letters. 

And I'm continuing with my strategy of being long until we don't have to be, until something major breaks in the S&P or the dollar rates. 

But for now, the cycle is bullish US equities, bullish commodities, especially energy and clean tech metals. 

Call it like you see it, 

Nick Hodge
Editor, Daily Profit Cycle

Nick Hodge is the co-owner and publisher of Daily Profit Cycle and Resource Stock Digest. He's also the founder of Hodge Family Office, the umbrella organization for his three premium services: Hodge Family Office, Family Office Advantage, and Foundational Profits. He specializes in private placements and speculations in early stage ventures, and has raised tens of millions of dollars of investment capital for resource, energy, cannabis, and medical technology companies. Co-author of two best-selling investment books, including Energy Investing for Dummies, his insights have been shared on news programs and in magazines and newspapers around the world.

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