Weekly Memorandum 11/30/2020
Equities are mixed to start off the week, but our focus is on the monthly-closing data, which will be recorded at today's close. Barring a price collapse today, all major equity indices are poised to close out at their highest monthly levels in history. This is hardly a bearish characteristic, and should be embraced with respect to the equity market's bull trend.
Treasuries were little-changed last week, and they are down slightly to start this week. We continue to monitor the U.S. Dollar closely, which continues to look weak. Further downside in the world's reserve currency should continue to be a boon for commodity prices. This past week saw Crude Oil close out at its highest level since early-March and before its hyperdeflationary episode in April. Various agricultural commodities are also poised to close out at their highest monthly levels in years.
We could be seeing the emergence of new secular trends in the market. There is a fair chance that the multi-decade bear market in agriculture and other commodities is over.
Cryptocurrencies are also set to close out at record highs for the month. Bitcoin is set to achieve its highest monthly close in history, while Ethereum is set for multi-year highs, and Litecoin for multi-month highs. Remember, higher-highs are bullish, not bearish. We will cover this in more detail inside the Mercator Crypto report, set to be published this evening.
We are fast approaching the most bullish time of the year, at least from a seasonal perspective. This equity rally continues to be technically sound, but we'll see how we react to potential political and geopolitical surprises over the next month.