Mish's Market Minute

How to Profit in the Market Amidst Rising Consumer Prices

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General Mills (GIS) recently stated they would have to increase prices on many staple products. This relates to recent price surges in fuel, packaging and shipping costs, which has put a strain on not only food supply companies, but many small and large companies throughout the pandemic.

With the markets' recent push to new highs in two of the major indices, has the constantly changing playing field opened new investment opportunities? If so, which symbols and sectors offer the best reward?

Three areas we are currently watching are:

  1. Back to work/school trend
  2. Precious metals
  3. Soft commodities

The back-to-work trend builds off increasing demand for clothing and self-care products as more people re-enter the workforce. For that reason, we are keeping an eye on L brands (LB) along with Estee Lauder (EL). EL is currently sitting near highs and needs to clear and hold over $318.34 for a successful breakout. If EL is unable to breakout and moves lower, we can look for a pullback close to its next support level at $309 or the 50-day moving average at $303. LB, on the other hand made a successful breakout. For an active trade, one could risk off the Wednesday's low at 71.08, which is under the breakout level of 5/18 at $71.99.

Looking at precious metals such as gold (GLD) and silver (SLV), both have gone through recent selloffs and are now offering low entry points. With GLD looking the strongest, each made a reversal pattern with a 60+ day low on 6/29, followed by a close over the prior day's range on 6/30.

The third space we are watching goes directly to the beginning of the supply chain -- soft commodities, such as sugar (CANE), corn (CORN) and soybeans (SOYB), to name a few, are on our watchlist. These offer a hedge against an inflationary period, since, no matter what unfolds next in the market, people will still need to eat.

With that said, we wish everyone a happy 4th of July and a restful long weekend!


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ETF Summary

  • S&P 500 (SPY): New highs. 425.46 support.
  • Russell 2000 (IWM): Main resistance at 234.
  • Dow (DIA): Next resistance level 348.60.
  • Nasdaq (QQQ): Holding near highs.
  • KRE (Regional Banks): 65.07 new support. 68 choppy area.
  • SMH (Semiconductors): Like this to hold over 257.
  • IYT (Transportation): 257.67 new support.
  • IBB (Biotechnology): 159 support area.
  • XRT (Retail): 96.23 support.


Forrest Crist-Ruiz

MarketGauge.com

Assistant Director of Trading Research and Education

Mish Schneider
About the author: serves as Director of Trading Education at MarketGauge.com. For nearly 20 years, MarketGauge.com has provided financial information and education to thousands of individuals, as well as to large financial institutions and publications such as Barron’s, Fidelity, ILX Systems, Thomson Reuters and Bank of America. In 2017, MarketWatch, owned by Dow Jones, named Mish one of the top 50 financial people to follow on Twitter. In 2018, Mish was the winner of the Top Stock Pick of the year for RealVision. Learn More
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