Clouds Cover The October Harvest Market

in January 2017, I wrote about the Chinese New Year’s Astrological sign of the Fire Rooster. At the time I reported that, “Yin fire is still positive for the economy and the optimism continues to bring confidence to buy, particularly in spring and summer time when the candle flame gains seasonal support and drives up the illusory optimism.”

Moreover, I went on to write, “as the yin fire is an illusory candle flame, it will be extinguished by autumn and winter.

The astrological prediction goes on to say that, “Serious setbacks towards October will bring a long-term bearish market as there is no more fire years before the Tiger year 2022.” Mother Nature has certainly shown us more than a fair share of rain with the recent hurricanes and another one on the way.

Even New Mexico has had an unprecedented amount of rainfall lately. I read today Tokyo is preparing for floods beyond anything they’ve ever seen. In California, as of September 2017, more than 4900 fires have scorched nearly 229,000 acres. Those fires have finally subsided.

Nevertheless, the October full harvest moon peers through cloud cover. Is it time to consider that the Yin fire has extinguished, hence ushering in a sustained period of rain?

Never fret, as one market’s rain could very well be another market’s fire. Currently, the ratio between the performance of commodities versus stocks has only been this low twice in the last 100 years. First in 1928-29 and then in 1967-69.

Last week, I mainly focused on the Federal Reserve and Monetary Policy. I did so because of their vocal intention to raise rates more and reduce the balance sheet. They spoke more enthusiastically that the strong labor market will lead to higher wages which in turn will lead to rising inflation. For an experienced commodities trader, the opportunity that could present itself is exhilarating.

Evidence appeared last Friday that perhaps the greatest hedge for the last part of this decade emerges. The 20+ Year Treasury Bonds are a hair away from breaking major weekly chart support. The Fed might actually keep their promise.