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Weekly Memorandum 9/13/2021

Equity markets retreated last week in a somewhat defensive manner. However, this decline will be viewed as corrective in nature instead of the start of a bear trend unless prices close below key support. The main concern, however, is the Dow, which formed a secondary, lower-high and is trading lower from that mark. Even so, there are plenty of support levels beneath this market, whereby buyers would likely step back into the picture. This market is still full of liquidity.

Bond markets were slightly lower last week, but overall, continue to trade in congestion. The trillion dollar question is whether this multi-month consolidation will resolve in the direction of the intermediate-term downtrend or the short-term uptrend. The U.S. Dollar caught a bid last week, but so did Crude Oil. Typically, these assets exhibit an inverse correlation, but that is not always the case. We like the bullish case for Crude Oil so long as prices remain above 62.00.

Cryptocurrencies pulled back notably last week too. Here too, we like the idea of a corrective decline unfolding, in anticipation of a higher-low, which would serve to fortify the existing uptrend. Ethereum continues to display more strength than Bitcoin. When it comes to precious metals, there are still technical issues that cannot be overlooked. Better opportunities remain elsewhere in the market.

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