Weekly Memorandum 11/1/2021

All major equity indices closed at their highest daily, weekly, and monthly levels in history. It really doesn't get more bullish than this, and therefore, we anticipate the rally to continue towards our upside price objectives.


T-Notes closed out near the lows of the week, as rates continue to trek higher. This is a sign that inflation expectations are showing no signs of slowing just yet. However, this does serve to attract global capital back into dollar-denominated assets. While foreign investors don't have much interest in Treasuries at the moment, there is tremendous demand for US stocks. The dollar (contrary to many analyst expectations) is on the cusp of a major breakout. The last time the Fed tapered in the 2010s, it led to a major dollar and bond market rally. Once again, this theme is on our radar.


Crude Oil continues to trade at its highest level in over 7 years. This is not helping with inflation expectations. While there is a demand for dollars, there is an even greater demand for hard assets. At some point though, the dollar rally will turn deflationary, and put a cap on commodity prices.


In terms of precious metals, ignore for now. Better trades elsewhere, especially from the long side. Cryptocurrencies continue to behave in a bullish manner. We just published a new Mercator Crypto report, and for the next 24 hours, we are offering $30 off annual subscriptions to this report.

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