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Analysis For Week of November 9thThere is plenty of reason to be bullish this week – the stock market was up for most of last week, there seems to be plenty of momentum in the markets, Joe Biden was just confirmed as the president-elect, and the Pfizer vaccine trial shows a huge 90 percent success rate based on initial trial results. Furthermore, there has a clear trend of a widespread economic comeback around the world. Even as a contrarian investor myself, it seems that there I plenty of motivation and incentive to ride this bullish wave. However, it is imperative that investors remain cautious of the situation at hand, with mid-leverage hedges such as some covered calls if the market takes a downturn. Stocks From a technical standpoint, there seems to be a clear positive breakout from the falling wedge. MACD on today, Tuesday, seems relatively neutral with histogram reaching highs, signally a potentially small fall before going up again even more. This allignes with the most likely Elliot wave analysis


Furthermore, Liquidity(reflective of consumer confidence), money(M2), as well as velocity of money have drastically increased in the last few months. From eikon Datastream, and tradingview. More money in the economy paired with the increase in spending would lead to higher stock prices, because some of that money is going into stocks as well as publically listed companies. However, inflation and the devaluation of the USD would also happen as a result(ray dalio mentioned this too in his most recent interview). Personally, I have a long position in the 2x s and p, and covered calls due Febuary, in the money. For specific stocks, I have stakes in chinese technology companies becuase they are extremely undervalued against the western market. Specifically, JD.com(bought in a few months ago), as well as tencent.



Case for shorting stocks It is reasonable to expect some sort of blow-off top in the S and P 500, in the next months or even years. However, after that, the case is that the debt bubble may soon pop, and stocks are way overvalued compared to what they were a few years ago as well as a few decades ago. For Gold and USDLikely trend would be the further slipping of the USD, as the US government keeps on passing massive stimulus bills, trillions flow into the market. Furthermore, other countries are likely going to be less dependent on the USD in the future.

From a technical perspective, it is likely that gold is in a wedge, and is preparing to break out of that wedge in the mid-long term. Remember, however, technical analysis should be only 30% of the total analysis for the financial markets. I personally have a long on gold etfs, as well as barrick. I am also short mid-term on the USD.




Some Intramarket Analysis For This Week



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