Bulls Still Holding Control- November 20th, 2020

The pandemic continues to be front page news. The FDA is to meet to decide the emergency use application for Pfizer’s vaccine on Dec. 10. The Operation Warp Speed group said they will be ready to have the vaccine for front line workers within 1-2 days after, potentially meaning December 12-15 to start vaccinations if the FDA decides quickly. Apparently they have been getting streams of data for a while on three different aspects. Early testing on animals, the manufacturing process, and now the final stage, Phase 3 testing. No doubt, they are already reading the application filed Friday. Just to set a baseline expectation, the normal approval process of a new vaccine can take about a decade. We would hope they don’t need a couple of months. We’ll leave that exciting news there.

The Nasdaq was one of the weakest markets in the world, for a second week in a row. A big positive push globally and the Nasdaq was flat. Is this just a rotation into commodities and rest of world, so money is leaving the Nasdaq in an orderly fashion, or a dire warning? It continues to be a must watch situation. The rally was global this week (see the last table in the market summary) with the exception of the USA. Breadth still held up as retail soared, and the energy names continued to rally in a commodity wave. Lots of bullish news on the commodity front and the fact that the Canadian market continued to break out above major resistance levels, suggests commodities going much higher.

As the US Dollar continues to stutter on support above 92, the way the rest of the charts are behaving, it looks like a lower dollar is the next wave. Crude oil breaking above $43.75 would probably coincide with a dollar breaking down. Copper breaking to new 7-year highs (set up this week!) would probably be based on a change in the dollar.

Summary: I am bullish and am invested as the SSIH suggests being invested. I am watching to understand the changing landscape on tech. Financials, industrial metals, energy and Electric vehicle trades all look promising. We are testing prior highs, so breakouts need to hold. The SPX slipped below the breakout level to close the week. I’ll call that annoying on Options Expiration Day.

Let’s jump into the charts. Click below to view the full PDF.