Chart of the Day - Friday, April 5, 2024
April 5, 2024
🏆 Today’s Chart of the Day was shared by Brian G (@alphacharts)..
- This ratio chart of Semiconductors vs. Commodities represents the battle between two narratives that have dominated the headlines in recent years: "The A.I. Boom" and Inflation.
- AI stole the spotlight from inflation last year as Semis exploded higher, but inflation is rearing its ugly head again as Commodities have perked up recently.
- This is exactly where Semis began to underperform Commodities in 2021. If this ratio continues to be rejected at its former highs, inflation will likely dominate the headlines again. However, a breakout would reignite the AI narrative.
The takeaway: The narrative is at a potential inflection point. To quote the legendary Paul Tudor Jones: "Price turns, and then the narrative follows."