Larry Williams: Inflation Cycles have Topped for Now
Larry discusses how bad news sells and everyone has a cognitive bearish bias. If you focus on the bad too much, then reality gets in your way. We saw capitulation in this market back in June. This is typically an excellent point to enter markets.
The stock markets are the biggest money making system ever invented if you can hold on.
It’s hard to find a good indicator that calls market tops. Good indicators reflect what is happening in markets. Emotions drive markets.
He discusses how each indicator should have a separate purpose. He uses COT reports to understand where the smart money is moving in the market. Seasonality plays are also important to consider.
There are natural cycles to the way things happen. When a combination of indicators coincide, that boost the probability of a winning trade. Markets move for fundamental reasons, including demand and economic condition reasons. You need both to understand what is going on in markets.
Usually, rising interest rates are bearish for stocks. Recessions usually start when central banks begin dropping rates after a period of increase. This may indicate those in control feel things are starting to turn bad. Stocks always bottom before a recession ends.
Larry believes the inflation period is ending, and it’s part of a six-year cycle. The math is going to start showing improvements in the CPI.
We’re in a fiat currency system, which has different rules than a gold backed system. Debt matters today, but only to a point. Currencies can get out of control, but if you have good financial leadership, the economy can be regulated.
He shows some charts that demonstrate that equity markets often lead inflation.
Larry believes that Bitcoin will be the tulip of our time. Commodities are the leading driver for gold. The only difference is the irrational emotional exuberance around its value.
He discusses his views on inflation and why paying attention to the commercial buying of gold futures is important.
There are commodities with strong seasonality like crops which tend to move in October.
Money management and controlling your emotions in trades is key. Learning and analyzing your losing trades is vital.
Talking Points From This Episode
- Trading advice and indicators from decades of being in the markets.
- Thoughts on the gold markets and the underlying causes of inflation.
- Seasonality and patterns in equities and the CPI.
0:00 – Introduction
0:55 – Change & Perspective
3:35 – Favorite Indicators
4:35 – Trading Vs. Investing
5:48 – Fed & Positioning
8:07 – Indicators & Purpose
11:38 – Rising Rates & Stocks
14:07 – Recessions & Labor
14:56 – Inflation Cycles
16:40 – CPI Chart Pattern
20:43 – Causes of Inflation
24:40 – Dollar Dominance
26:12 – Equities & Inflation
30:34 – Fallen Angels
31:45 – Dollar & Crude Oil
32:53 – Gold Drivers
36:43 – COT Charts & Trends
42:26 – Perspectives & Truth
43:48 – Seasonality & AG
46:00 – IBM Seasonality
49:31 – General Trading Advice
52:41 – Wrap Up
Larry Williams has been trading futures, commodities, and stocks for almost 60 years.
Through good years and bad, Larry has survived recording and teaching his market wisdom.
Larry is a best-selling author featured on Amazon. You can find most of the books Larry has written there.
Larry Williams has taught thousands to trade the markets, and has been the only futures trader in the world to repeatedly trade $1 million of his own money live at seminars around the globe.