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Trade Alert – First Solar gets too bright as inflation burns

April 30, 2013 by Cody Willard

First solar is up big again today, hitting new recent highs and I am going to go ahead and trim a little bit here, about 1/5 of my overall position (see: First Solar is back and tradable).

Juniper’s up big today and is now up nearly 10% from our recent big tranche buy level. I am holding that one steady (see: Another key infrastructure investment).

Markets continue to act jiggy and there’s little resistance to the “risk-on” trade continuing for now. “Risk on” means that the long-term artificially low 0% interest rate environment is, as we’ve discussed before, forcing people to pull their money from safer places like CDs and Treasuries and putting that money into riskier assets like stocks (see: Stocks Poised For More New Highs).

Intel, is, right here right now even after rallying 20% recently, yielding nearly three times as much as 10 year Treasuries are (see: Intel a Value Trap?).

And speaking Treasuries, can you believe that they are setting all-time new highs again, meaning that they are yielding all-time new lows again today? Here’s a chart of the entire history of the US 10 year Treasury going back all the way to 1790, courtesy of the Fed, BofA and Bloomberg:

10-year-treasury-1790

Could the yield go even lower? Yes, a little bit. Could the yield go negative? Yes, but that would likely indicate a horrendous economic and market crash on the horizon. Could the yield stay down here near unprecedented historic lows for a years? Yes, and the Republican/Democrat Regime and the Federal Reserve will do everything they can to make that happen. Including continue savers and retirees into higher-risk assets and inflating more asset bubbles, continuing the playbook as I’ve outlined for us many times in the past few years (see: Search Marketwatch “Cody Bubble”).

What would likely be the catalyst to make yields go up? Debt crisis. War between two big economies. Unforeseen consequences of the ongoing and escalating currency wars. And inflation. (see: Indicator Update: Interpreting Mixed Signals)

Speaking of inflation, do you believe this chart?

PCE Inflation

Or, is it, as I think it is, a case of junk-in-junk-out? (See: The chart that explains why the Fed is on hold this week.)

I created a poll to get some idea as to how realistic that chart is to our readership, so please kick here and help us get a sizeable sample and I’ll report the results back in a column next week.

Poll – Does the government accurately report inflation?

Related posts:

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Filed Under: Free Trading and Investing Articles by Cody, Trading

Disclosure: At the time of publication, the firm in which Willard is a partner and/or Mr. Willard had positions in some of the stocks mentioned above although positions can change at any time and without notice.

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This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security or cryptocurrency or token any other product or service by Cody Willard or any other third party. Furthermore, nothing in this is intended to provide tax, legal, or investment advice and nothing in this should be construed as a recommendation to buy, sell, or hold any investment or security or cryptocurrency or token or to engage in any investment strategy or transaction. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.

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