Weekly Memorandum 6/28/2021
After flashing bearish signals the previous week, stocks did exactly what they needed to do by gapping up and closing near last week's highs. This suggests that further upside is on the horizon for the immediate future, but we will need to see the Dow join the all-time high party, or else this could turn into a sell signal. Even so, we note that capital is trying to revert back into the growth and tech-segments of the market, as evidenced by the Nasdaq's break to new all-time highs.
Bonds suffered some losses last week, as the Fed remains keen on keeping short-term rates low over the next few months. In addition, they've not made public yet their plans to begin tapering. As we've mentioned before in our reports: It's all about yield curve control.
Crude Oil closed at a new multi-year high last week, and is now firmly within our stated price objective of 75.00 +/- 2.00. We could plausibly see prices in the low 80s at some point during this current rally, but it really depends on the U.S. Dollar, which pared some of its gains from the previous week. The world reserve currency did manage to form a higher-low in late-May, but we will need to see a higher-high form at some point in order to establish an uptrend. That has not happened yet.
The carnage in the grain market continued last week too, but we're still seeing strength in segments of the livestock market, with the exception of Lean Hogs. Precious metals were up slightly last week, but largely consolidated their losses from the previous week. Cryptocurrencies finished lower last week too, but well off the lows of the week. Still some technical headwinds that need to be resolved in this space before a bull market can resume.