Two Get Approved- December 18th, 2020

The Pfizer vaccine rollout continues. The Moderna vaccine got approved. More vaccines are in the approval pipeline but look to be later in January. JNJ. Astrazeneca. With my strength indicators weakening and the majority of good news out about the vaccines, it seems like the market wants to pause here. Until you look at Tesla stock. The roaring 2000’s 2020’s.

Energy is really whippy here. Energy was the only ‘down sector’ this week, even though crude oil was up 5.7% to $49. Contrast that with last week when it was the only sector that was up. Joe’s climate plan, Justin Trudeau’s climate plan, the EU’s climate plan, it all sounds imminent. We need something like 22 new hydro dams per year for the next 15 years to keep up with the demand for electricity in North America. Copper continues to run.

I have focused on the setup in Gold and Silver in the charts below. While Friday was a big down day for the XME (metals and mining) and a weak day for gold miners, the precious metal charts are aligned for a big breakout, potentially this week. With a little bit of nostalgia, the picture to the left was taken in Kaslo, British Columbia, which proclaimed itself as the Mineral Metropolis of the World. If these precious metal names start to lift with the rest of the mining
stocks, the mineral stocks might just be the best investing metropolis for 2021. Let’s check in!

I am wrestling with weakness in Canada and my expectation for continued strength in commodities. For the most part, it was an up world globally. However, Canada had a lot of red sectors as it tries to take out the prior highs. If Canada starts to weaken, it is another clue that strong markets like the US could weaken as smaller markets start to crack before big ones like the US do.
The Schnell Strength Indexes have moved into the cautious zone, with the fastest indicator very, very weak. Banks will be up on Monday as they received permission to buy back shares and Tesla will join the S&P 500. We have just finished a strong investing year, as hospitals start to turn away COVID clients due to overcrowding.

Summary: I am now cautious as my strength indicators suggest. I’ve raised cash, but still hold some investments.

Let’s hit the charts. Click below to view the full PDF version.