Seasonal Rally or December Distribution? US Market Update!

By Bennett November 15, 2021

Greetings Traders and Investors, Bennett here checking in following a very bullish last month of trading. Much has unfolded since we met last, including our upside targets being met in Crude Oil, the US Dollar and 10yr yields. Our November FOMC meeting saw an initial dovish market response, sending rate hike probabilities lower as equity markets established support for upside continuation. Last week the mixed signals continued, as our Consumer Price Index report once again re-ignited inflation concerns, resulting in a sharp rally higher in Gold. Simultaneously we saw bonds move lower, sending the 10yr yield higher into our upside 1.67% target. For now, the upside move in Gold feels a bit premature when considering the chart, and instead we for now view the move higher in precious metals as corrective, with the true upside potential not on the horizon until the end of Q1 next year.

Other interesting developments we saw last week included 2022 rate hike probabilities moving significantly higher, along with breakeven inflation rates exceeding May area highs. While we do see the indexes highest degree of trend still well in-tact, charts are beginning to suggest we see a larger market correction at the end of Q1 or as late as Mid Q2 next year. That doesn’t mean I’ll be looking to scale back any of my investments, nor will I attempt to side-step the move by remaining sidelined in cash until it happens. This market has remained extremely resilient, navigating every headwind that has come its direction. Not to mention the recent broadening of the trend, encompassing more stocks and sectors with the small and midcap breakouts. So tune in as I take you through the charts, bringing you up to speed with our current market trends. See you on the next one!

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