I’m watching the sun sink into the gulf of whatever water from my mobile office.
We’ve done the drive from Key West to Naples a bunch lately and it’s just lovely.
No major highways. You take a road from the middle of the ocean to another through the middle of the Everglades.
It is cruising, defined. Florida style.
You can see both sharks and gators right out your window along the way.
Anyway, I’ve found that I really enjoy reading and writing from the car. It frees me from my desk-brain.
I also really enjoy uncorrelated exposure. It frees me from my overweight risk-on equity positioning.
And I don’t mean defensive exposure.
I’m talking about exposure to things that can move fast and generate alpha in bull cycles but don’t necessarily move with the broader US stock market.
I’ve spent a lot of time pounding the table on speculative growth lately, but here’s the thing. I’m only there for the juice. These stocks rip unlike any other during growth-driven bull markets.
But I’m old enough to have lived through some cyclical-centered bull markets.
And let me tell you… when commodities trend, they really trend. They are the ARK stocks of the value thematic.
I think we’re going to get speculative tech-like returns from metals this year.
And I don’t mean gold. Precious metals are already working. Silver is sloppy, but due for some catch-up.
When it comes to industrial metals, copper is coiling tight and could break out any day. However, it’s still messy.
But how about that move from Platinum last week!?
Platinum is coming out of a sweet base and palladium looks poised to follow.
And don’t get me wrong, this is the funky stuff. But it’s exactly where I want to be right now.
The animal spirits are out here. Money is looking for new and interesting places to go. We’re seeing this play out for tech stocks, but I also think we’ll see it for commodities.
And when I think of these two quasi precious metals, I always think of our old friend, Sibanye Stillwater.
This is a truly special vehicle for bull markets in platinum and palladium.
It always leads spot markets and is giving us the green light right now.
By that, I mean it’s ripping out of a textbook reversal pattern:
This chart shows just how close the ties are between SBSW and these two metals. Sure, it mines others—but platinum and palladium are the drivers. And right now, both are pushing toward the upper bounds of multi-year ranges, with volatility compressed to an extreme low.
That’s the kind of setup that often precedes major trend shifts.
Getting exposure to these metals via the equity market isn’t the easiest. ETFs like $PPLT and $PALL exist—and they’re fine if you want clean, unleveraged exposure.
But if the goal is to maximize the upside from new uptrends in these metals, that’s what SBSW is for.
Here’s what it did last cycle relative to platinum and palladium:
So, which would you rather own for the next cycle?
Now that we all agree, here’s the setup:
We’re not waiting for platinum and palladium to break out because SBSW is going right here, right now.
When the metals resolve higher, we’ll get confirmation. For now, we trade what’s in front of us.
A clean breakout above 5.75 should lead SBSW higher through that volume pocket.
And once that happens, the next stop puts us in the 20s around those old highs. That’s exactly where I think this train is headed. And I think it happens a lot sooner than most would bet.
Remember, when commodities go- they go.
I want to own more and more of them these days. Do you?
Steve
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