Hey There Income Hunters,
I’ve been waiting for this report to come from the Fed. They are basically shooting a warning shot across the bow of the market:
“Asset prices remain vulnerable to significant declines should investor risk sentiment deteriorate, progress on containing the virus disappoint, or the economic recovery stall,” the central bank said this week.
The Fed is desperately trying to get the market to break down to give them cover so they can print more money.
What the Fed doesn’t get is the market is figuring them out.
The market is looking beyond the transitory lie, insider trading scandal and QE taper charade and onto the next phase of inflation.
Today, I’ll show you what that looks like and what trades to consider.
This market will continue to be driven by the Fed, and the Fed and Inflation will go hand-in-hand for many years to come.
If you want to get the upper hand and beat the Fed at their own game then register for my live event TONIGHT at 8 p.m.
I am revealing details of my Power Income Trader system, a 4-step process that puts you ahead of the Fed’s flow so you can beat inflation and gain generational wealth instead of letting inflation beat you. Register here.
Energy Is Still the #1 Sector in This High Inflation, High Growth Environment…
Higher prices in one product pushe higher prices in others.
Look at the liquid natural gas market.
Global liquid natural gas demand continues to rise, as do prices … and now that trend is bringing more demand and higher prices for natural gas.
This is sustainable due to infrastructure constraints dampening supply response … Meanwhile, fear of limited investment in the sector has proved to be incorrect as the industry has proven its resolve to continue to grow.
Kinder Morgan (Ticker: KMI)
KMI is one of the largest midstream energy firms in North America. KMI doesn’t have exposure to commodity prices directly, but they were still affected negatively during the pandemic.
However, they did benefit from the ice storm in Texas (remember that?) and are in a great position to profit as the economy rebounds.
Let’s check their valuation:
KMI is currently trading at an 18% discount to its fair price.
It distributes a dividend over 6% and has invested billions in a transitioning oil environment. It’s a bold move and one that should benefit them in the long run.
Let’s Check Their Technical Setup…
The graph below illustrates price, volume and volatility data for KMI. Notice the discount that implied volatility is trading at compared to actual.
This shows an imbalance that reflects the lack of speculation, and that is a great thing with a stock that has a strong balance sheet and pays 6% dividend.
The markets will soon realize the energy sector is finding willing investors. This will lead to steady growth in earnings and dividend payout for KMI.
I am going to buy shares in KMI and other mid-streamers and complement the income with covered calls at key resistance areas.
Bring It Home
It is critical to keep moving around in the sectors to create some alpha and I think the mid-streamers are primed to have a great year in 2022 and payout some nice dividends, as well.
Get ready for another CPI report tomorrow that will take inflation to another new high
It seems like we say that a lot these days.
As long as the Fed can keep the money flowing we can expect more of the same.
That’s why attending my live Power Income Trader event tonight is a must.
Live and Trade With Passion My Friends,