Commodities Take the Stage- November 27th, 2020

The pandemic continues to be front page news with the potential for vaccinations to start within two weeks! 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.

The Nasdaq was one of the stronger markets in the world which broke a 3-week stretch of underperformance. A lot of new leadership names started to move higher. The US Dollar broke below support and closed below 92. As I mentioned last week, if the dollar breaks down it should be extremely bullish commodities. Copper and Oil soared on the week. Copper roared, absolutely roared ahead. It didn’t bother to pause at resistance, it just put it in the rear-view mirror. Pictured left is Caterpillar equipment at a huge copper mine. I want to get moving on Copper trades even more.

An almost confirming fact of the optimism coming through from the vaccines is the selling off of gold, gold miners, silver and silver miners while the dollar dropped. I mentioned last week that Gold had not been performing well with the dropping dollar. To top it off, the $VIX dropped to new post-COVID lows. The macro chart package sets up this beautiful backdrop for foreign investment ideas and commodities to be intertwined with tech exposure for the first time in a long time. This comes after a new thrust in the 4th quarter of 2019 stalled with COVID. That push started as the trade tennis between the US and China eased.

Summary: I am bullish and am invested as the SSIH suggests being invested. Financials, industrial metals, energy and electric vehicle trades all look promising. Foreign market exposure can help with a dropping dollar. We are still testing prior highs, so breakouts need to hold. The $SPX and small caps closed at highs. The $NDX posted the highest weekly close, but not above Sept intraday highs.

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