Market Watch For May 17-21, 2021 – Inflation Fears

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Over the past several months inflation fears have been creeping into the markets and this past week we saw a high print in both the CPI and PPI finally giving the markets the data point that all of us have suspected.

The inflation is real – things are getting more expensive.

Outwardly the Fed continues to talk down the inflation readings labeling them transitory however one must wonder at what point does transitory become reality and the fed is forced to taper their monetary policy.

All of this played into further weakness in interest rate sensitive assets, ie. high tech, growth, and cryptocurrencies.

By the end of the week, we had a bounce in equities markets and despite recent weakness, the SPY and DIA remain close to all-time highs.

More than likely we see some short-term strength and backfilling/consolidation play out the coming weeks until the end of the month.

Here are some of the ideas in this week’s video:

  • An update on the negative divergence between SPY vs. S1FI – # of S&P100 stocks above their 50 day MA
  • Average Monthly Range – a study I watch carefully and what it tells us about VXX
  • What the US 10 year note is telling us
  • Gold continues to outperform
  • Bitcoin and Ethereum are at a critical level for the bulls to defend otherwise risk a sharper pullback
  • Did Elon’s tweet cause the selloff in Bitcoin?
  • How I traded DOGE – not well!

 

Market Watch For May 17-21, 2021 – Inflation Fears

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