Hey There Income Hunter,

The losses are starting to mount.

Internet and tech-heavy investment firm Tiger Global has bled $17 billion so far in 2022 …

Japan-based SoftBank reported a $27 billion loss this week …

And this is just the beginning. There will be many more stories like this to come.

Now, we did get a nice rally into the close on Thursday, which may have come from the San Francisco Fed president Mary Daly.  who spoke late in the day and commented that hiking by 50bps per meeting is likely. 

It’s a stretch to say that is a bullish statement for stocks, but they have gotten a bit oversold … so we’ll see if we get any follow through today. 

For me, the focus Thursday was on the metals and miners. I have been patiently waiting for a day like that, which had all the makings of a capitulation in many names.

Let’s look at a couple of names that have good chart patterns to play against – and the right timing to make a move.

Tighten Up

First, let’s discuss why I think you should be preparing for the Fed to announce an end to its tightening cycle in the months ahead …

When an economy carrying massive debt – plus twin trade and current account deficits – is nearing a recession (and its equity and bond markets are collapsing), it is a sign of a pending crisis.

Here’s why …

You see, the US has relied on soaring asset prices for years to drive tax receipts that cover government expenses. When asset prices fall, tax receipts fall along with them.

The big problem is this …

Even with all-time record tax receipts from the $6 trillion in stimulus over the past two years, 120% of those receipts went to entitlements, defense. and Treasury spending … so the US had a deficit and STILL had to print money to pay it.  

Now asset prices are plummeting and as the economy slows, tax receipts will fall and the Treasury will have to increase issuance of Treasury bonds just as the appetite for bonds are dwindling. 

This is why it is farcical for the Fed to talk about another eight rate hikes, plus draining $1 trillion in funds from the markets through QT.

Not happening, and the market will get there eventually.

What Happens When the Fed Pivots Back to QE?

When the Fed announces a pivot back to QE there will be a massive rush back into commodities, metals and Bitcoin because the Fed will be admitting it can’t control inflation and needs to rescue the financial system.

That will be an indication that the central bank will not be tightening again in this cycle and the printing press will be working overtime.

Bonds will be for sale, the dollar will reverse and go into a bear market and money will flow into hard assets again.

The lowest risk/highest reward trade for this, in my opinion, is the Van Eck Gold Miners ETF (GDX).

It may not be the sexiest play since speculators love the more volatile silver miners, but gold is a monetary metal used by central banks to secure their reserves. It may also end up being used to back a new basket of reserve currencies, and that is a massive wild card that could make you a fortune. 

Let’s take a look at GDX … 

As you can see in the table below, GDX is a $13 billion assets-under-management ETF with very good liquidity, as shown by its average spread of $.01 and daily average volume of almost $1 billion. 

Live and Trade With Passion My Friend,

Griff