It was another bullish month for US equities, SPX +134pts (3.7%) to 3756, with the Nasdaq comp’ +689pts (5.6%) to 12888. WTIC gained +$3.18 (7.0%) to $48.52. Copper gained +8cents (2.4%) to $3.52. The USD cooled by -196bps to DXY 89.89. The US 10yr yield settled +9bps to 0.93%.
SPX, monthly
Nasdaq comp’, monthly
WTIC, monthly
Copper, monthly
USD, monthly
US 10yr yield, monthly
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Summary
Equities: another very bullish month, with ALL the main indexes breaking new historic highs. The SPX is rather s/t over-stretched, well above the upper bollinger of 3683. I would note the 10MA at 3242. Equity bulls have a clear 500pts of downside buffer before having to worry about whether the m/t trend is broken.
Commodities: Both WTIC and Copper broke multi-month highs, clearly helped by further dollar weakness. Big target for WTIC in 2021 is 65/66s, with copper to psy’ $4.00.
USD: a second consecutive net monthly decline, printing a new cycle low of 89.47, the lowest since April 2018. The 88s are massively important, and whilst a bounce is a s/t threat, an eventual downside break appears very probable.
Bonds: Yields climbed for the third month of five, with the US 10yr settling just moderately shy of psy 1.00%. We have a secure double floor from around 0.50%. I would note m/t declining trend, which in January will be around 1.17%. Considering the Fed’s underlying bid on bonds, its very difficult to see yields breaking up and away in 2021.
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Dear Subscriber
… and that concludes the year. As I type its 4.30pm EST… 9.30pm GMT. New Years Eve can be a difficult time for some. I hope things are fine in your world.
Without getting wrapped up in the election events due next week, there is little reason not to expect 2021 to be any less crazy than 2020. After all, every year in the twilight zone is just ever more bizarre, right?
I will personally hope for ‘boring and calm… with a return to at least semi-normalcy’, by the summer.
As ever, feel free to message me via Disqus or email.
Sincerely, happy new year… and goodnight from London
yours… Philip
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Posting schedule…
The weekend post will likely appear by late Friday @ https://tradingsunset.blogspot.com, and will detail ten of the world equity markets.
There will be a special ‘The outlook for 2021’, which will be comprised of my views, but also a number of polls, and this will likely appear on Saturday @ https://tradingsunset.blogspot.com
I will endeavour to cover as many end month and end year settlements for individual stocks across the next three days as I can manage. As ever… if there is something you want me to highlight…. let me know!
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The next post on this page will be the pre-market brief, 8.30am, Monday, January 4th 2021.