Weekly Memorandum 1/3/2022

Stocks rallied to new all-time highs last week, with the exception of the Nasdaq. If the Nasdaq falls to join the new all-time high party, it could turn into a fairly potent sell signal, especially considering stocks haven't experienced a 10% drawdown since September 2020. Moreover, we are starting to see sectors like consumer staples and utilities outperform, which tends to be a risk-off signal.

Bonds were largely sideways, while Crude Oil was marginally higher. Precious metals staged a strong rally, but are down sharply so far on Monday. So long as a higher-low forms, there could still be a path for further upside in this downtrodden sector. The U.S. Dollar pulled back rather sharply on Friday, but overall, continues its consolidation near multi-year highs. This type of price action is bullish. Cryptocurrencies were mostly lower, as both Bitcoin and Ethereum continue to display technical issues in the short-term.

Tomorrow (Tuesday) ends the Santa Claus Rally period. So far, returns have been positive, which portends positive omens for stocks in 2022.

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