Consumer prices just hit the highest level ever recorded. Gold refuses to move.
Blake Young reads that split as a stagflation warning. He’s already rotating into the sectors built to survive it.
PPI keeps printing new highs. Producer prices tend to lead consumer prices, and Blake expects next month’s CPI to climb again.
Gold should be running in that setup. Instead, it’s sitting on support that dates back to June.
Blake points to the bond market. Bond prices just hit record lows, which sent yields and borrowing costs higher.
Higher borrowing costs slow growth. Elective categories like car prices aren’t rising, and Blake sees that as a sign that demand is weakening underneath the headline.
Copper gives him the next signal. A break below its six month low would tell Blake that demand is gone.
That’s why Blake wants defense right now. He’s focused on utilities, healthcare, and consumer staples for the next couple of weeks.
Healthcare looks the strongest. The sector gapped through its 52 week high and closed higher, a move Blake calls a runaway gap.
In tonight’s video, Blake walks through the setups he’s using:
- PPI is pushing back toward 3%. Food and fuel made up 24% of last month’s CPI, and a copper break below 5.80 would confirm the demand problem.
- Eli Lilly posted a runaway gap on high volume. Blake sees room from about 1100 toward 1280 and sells a 30 day put near the 30 delta for 2.8% with a 7.5% safety net.
- XLU broke its downtrend and pays a 2.8% dividend. Blake sells puts on SRE, Dominion, and Duke, with dividends near 3.21%, 4.25%, and 3.63%.
- Amgen looks extended on light volume. Blake prefers a short put vertical that sells the 430 and buys the 425.
- Coke cleared its highs. Blake wants a test of 92 before starting a long term position that pays a 2.3% dividend.
Blake is collecting premium in these sectors while he waits for better entries. The stagflation signals will tell him when to press harder.
