Weekly Memorandum 7/19/2021
After printing bearish candlesticks last week, stocks are poised to start off this week on a defensive note. The signs have been mounting that a high of significance was imminent, and it now appears to be all but confirmed. The natural question that follows is to what degree any forthcoming pullback will be. There are multiple support levels beneath this market that should provide buyers plenty of opportunity to hold up the market, especially given the high levels of liquidity.
Bonds ended last week on a rather strong note too, as the flight-to-safety trade continues. The dollar is benefiting from the demand for security as well, as it closed out at a multi-month high last week. Crude Oil finished lower last week too, as deflationary pressures continue to creep over the markets.
Precious metals finished lower, but are seeing nice bids come in this morning. Cryptocurrencies continue to trade in a defensive manner, and Bitcoin is close to breaking to new lows. After all, it is in a downtrend.
A new Mercator Letter will be published this upcoming weekend, where we will update our current macroeconomic outlook, as well as key support and resistance levels for various asset classes, including stocks, bonds, USD, and Crude Oil.