Green Eggs and Ham – July 24, 2021

The markets sudden bounce at the 50 DMA on the SPX was more than I expected, and it was a big bounce, which surprised me. Technology names literally soared. SNAP was up 30%, Moderna up 22%. ROKU up 18% to be close to a breakout. The large cap names ripped higher. I have the charts of Alphabet and Facebook in the newsletter. They looked like they were part of the blue origin capsule, rocketing higher.

A few commodities had big bullish pushes. Natural Gas broke a 15-year downtrend and Lumber bounced after being chain-sawed 29% last week. Lithium and rare earths migrated higher, but it is a disparate group with some of the names not participating at all.

The dollar has some bullish signals going on, weighing on commodities generally. The dollar broke out to new highs over the range of the last three weeks and broke the longer-term downtrend line. The PPO has moved into positive territory and the cycle lines suggest a big move ahead for the dollar. I’ll cover more on this on the monthly conference call.

Here are the details:

Dwight and I will host the August Conference Call on July 29th. Click on the link to join at 5 PM EDT, Thursday. Password = energy

An abundance of oil names will report this week. We continue to have oil inventory data coming in shorter than expectations, but the oil names haven’t responded. We’ll see if the big test of support for crude oil down to $65 was enough and now we pump the next leg higher.

Summary: Technology names dominated the tape this week. Consumer discretionary also did well. It is the period to be lining up for the second half surge in retail. With a huge number of companies reporting this week, we’ll see what is going on and the optimism for the 3rd quarter should still be there. The noise in the trading room this week won’t be about the Seattle Kraken hockey draft, it will be the Federal Reserve meeting.

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