Summary
This email introduces the first instalment of a formal watch list, focusing on US-listed resources, commodities, and currency instruments positioned to benefit from the second half of the real estate cycle and the final years of the Kondratieff wave upswing. Phil Anderson presents five tickers with chart commentary, noting breakout levels and pullback patterns, with an Australian list flagged as forthcoming.
Key Claims
- The second half of the real estate cycle is underway and should drive outperformance in mining, metals, and commodities — confidence: high
- Each successive real estate cycle second half has produced a lower peak in the US Dollar Index, followed by a new dollar low — confidence: high
- The US Dollar Index peak of September 2022 is expected to hold as the cycle high; a break below 104 on DXY signals the next phase of the downtrend — confidence: medium
- RIO has formed a bullish ascending-resistance pattern since ~2021, with each pullback to the $72 level shallower than the last — confidence: medium
- The recent June 2024 low in RIO coincided with the solstice, noted as a Gann timing observation — confidence: medium
- DBC made a higher low in December 2023 relative to the June 2023 low; a break above $24 would signal commodity rally acceleration — confidence: medium
- The combination of the real estate cycle second half and K-wave upswing final years could produce a major commodity rally — confidence: medium
- Demand growth in the cycle second half makes offshore drilling and hard-to-reach resources more economically attractive — confidence: medium
Mex Pete References
None.
Stock Picks / Signals
- RIO (NYSE: Rio Tinto) — Bullish watch; looking for support at the 50-day MA as a potential breakout trigger to new all-time highs. Key support/resistance level: $72. No formal buy price yet; to be posted to watch list.
- DBC (NYSE: Invesco DB Commodity Index Tracking Fund) — Bullish watch; breakout level to monitor: $24. No formal buy price yet.
- DXY / UDN (Invesco DB US Dollar Index Bearish Fund) — Bearish USD bias; a break below 104 on DXY corresponds to a move above $18.25 on UDN as a potential long entry signal.
- VAL (NYSE: Valaris) — Bullish watch; key breakout level above 80 resistance has been shallower. No formal buy price yet.
- PICK (NYSE: iShares MSCI Global Metals & Mining Producers ETF) — Bullish watch; key breakout level above $46 to new all-time highs. Holdings include RIO, BHP, Nucor, Freeport McMoRan. No formal buy price yet.
Note: All tickers listed as watch list candidates only at time of writing. Formal buy-in prices to be posted separately.
Predictions / Forecasts
- US Dollar Index peak of September 2022 will hold as the cycle high for this second half — timeframe: current cycle
- Break below DXY 104 will signal the next leg of the dollar downtrend — no specific date given
- Resources, metals, and commodity stocks to benefit materially through the second half of the real estate cycle — timeframe: multi-year
- An Australian watch list will follow in a subsequent email — timeframe: near-term
Notable Quotes
“A weakening U.S. dollar is a hallmark of the real estate cycle’s second half. In fact, each successive second half has seen a lower dollar peak, resulting in a new low for the dollar before rallying again in the first half.”
“I note the recent low for June being the solstice.”