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Weekly Memorandum 9/20/2021

Stocks are set to start the week on a defensive note, as we already broke last week's lows and are trading below key support levels. A close below these price zones would be bearish and could lead to more selling. It's imperative that we avoid the formation of a lower-low, as it would be the first step in the establishment of a downtrend. Even so, the FOMC is set to speak this week, and fear levels are already high, so further downside could be capped.

Interest rates rose last week, but are now falling in response to a flight-to-safety trade from the equity rout. There will likely be wide gyrations in the bond market this week too, as the Fed is supposed to provide further guidance on their tapering plans.

The U.S. Dollar rallied nicely last week after solidifying yet another higher-low. It still needs to clear key resistance levels, but it's on the right track thus far.

Cryptocurrencies are down hard this morning too and appear to be on their way to test former-resistance-turned-support. A successful retest could fortify the short-term uptrend. Otherwise, there could be some real problems unfolding in this space.

Commodity markets were mixed last week. Some grains did well, while Crude Oil rallied nicely. Precious metals were down hard.

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