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Weekly Memorandum 7/26/2021

Stocks are up at new all-time highs to start the week, after displaying resiliency last week by forming yet another higher-low. Last week's initial volatility was absorbed very well by buyers, which is a sign that liquidity levels remain very high thanks to an accommodative Fed.

The big story to start this week though is cryptocurrencies, which appear to have completed their corrective decline and are now surging higher. The higher-low that formed last week serves to strengthen the bullish case. A break back above 41,000 in Bitcoin would all but confirm it. A new Mercator Crypto Report will be released this upcoming weekend where we will share our updated sector outlook.

In other markets, we note that bonds may have formed an important high last week. That is, interest rates on the 10-Year Treasury Note appear to have bottomed and look poised to rise again. The Dollar continues to benefit from the carry-trade, and is on the precipice of establishing a short-term bull trend, so long as it can exceed the March highs. Crude Oil fell sharply but then rallied back nicely as well. Grain markets struggled again but livestock continues to show signs of strength.

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