Inflation has long been a word that the Federal Reserve uses but the general markets have forgotten about.
Why? Well because it’s been virtually non-existent for years. Key indicators like commodities (i.e. copper) have been in a down-trends and the Materials Sector (XLB) has lagged… until this year.
As you can see, commodities have been making a comeback this year and are testing an important down-trend line. Copper futures have also rallied and are testing its own down-trend line. And Materials have risen to make new highs but have yet to close above it prior highs (so also testing important resistance).
Taken together, this is a big test to see if inflation is peaking or about to end long-term bearish trends. Stay tuned!