Uptrend Continues – February 13th 2021

The market soared through the presidential election, the storming of the capitol, the second impeachment, and the subsequent finalization of that 3-month period. Amazing in hindsight. Since the first day of November, the markets have been very bouyant. The Nasdaq volume, particularly bouyant. Record setting in fact. Again! While the Nasdaq volume and price continues to soar, the $SPX had it’s lowest volume since August, with the Christmas and Thanksgiving period lower * but we see those periods as normally low volume. The current rift between large cap volume and Nasdaq bizarre volumes goes into my analysis as cautionary for the current memes of clean-tech and biotech. We might also find the news media focusing more on the economy, rather than the gamification of stocks here.

The US rollout is going extremely well now, with a 7-day average of 1.66 Million/day (11Million/week). Just to help understand how good that is, the Canadian population is increasingly frustrated, falling to #52 on the world ranking for vaccine rollout. Tim Horton’s, the Canadian Coffee company, used to have an annual promotion called “Rol-l-l up the rim to win”. The Cdn vaccine rollout is now a joke as the picture suggests. Congrats for the rollout speed in the USA. I think the strong performance of the US vaccine is supplying the continued strength in the markets even at high sales/stock price ratios.

Crude oil made another new 52-week high and energy was the top sector of the week. While I am bullish liquid energy (oil, gas, diesel, natgas) over the near term, I am also bullish over the annual time frame as long as we don’t get a new virus strain that roils the world. A dramatic shortage of capital is constraining new drilling as old reservoirs deplete. This will eventually balance (2022?) but currently it looks very supportive of higher prices. So does OPEC throttling production.

Financials had another big week on the back of the move in yields. Broker/dealers soared. The KBE bank ETF is close to new 5 year highs. As the move in yields still has room to move, this might be a nice area to think about as it breaks above recent consolidation.

Summary: I continue to like the commodity trades as that matches with the inflation the Fed is trying to create. The backdrop in the USA is bullish, as things are improving. It also sounds like more stimulus is coming. Happily, the political focus will diminish for now.

I spent the Sunday with the family for Valentine’s Day. That created a newsletter delay. Let’s hit the charts.

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