What About Metals And Mining

XME has come back to retest major breakout points and the 200 day moving average. We generally like the metals and mining theme into a new inflationary regime which still doesn't seem to be going away anytime soon. Models from sell side suggest inflation has peaked and the prices have moved first. The risk reward is simply we haven't seen inflation in a generation(s?) and we don't know the extent with regard to time of supply chain and stimulus precedents have on the global economy yet and inflation. This could be a nice entry into these metals and mining names if things are not as transitory as economists would lead you to be.

Ranked Mining Stocks

We like the risk reward on SLCA and FCX from here. SLCA is flirting with its prior highs near 15. This is a n interesting spot with a couple of dollars in technical risk for a move back into the 22+ handle.

Likewise on FCX, this is an import support spot which lines up with the broad setup on the materials basket. From a weighting perspective, this is most likely a "starter" type of position given the technical nature of how much this has come off from highs. We like momentum. This seems to have broken some over the last few weeks. Eyes peeled but interesting spots.