Soft Commodities Firming

US Equities markets continued its melt up +.75% on average , hitting new all time highs in three out of key benchmarks while interest rates sold off hard after a dismal bond auction.

Economic data points to a slowing global economy with China’s exports declining as imports plunged. Singapore’s economy is shrinking as well which is not a good sign as its generally perceived as a lead indicator for global demand or the proverbial canary in the coal mine.

A fresh breakout in soft commodities, along with strong performance by anything gold related was also noteworthy. Considering that both soft commodities and precious metals are still  hovering at multi decade lows relative to stocks it’s worth paying attention to.

This week’s highlights are:

  • Risk Gauges maintained a bullish stance
  • Volume patterns improved and moved into bull move with institutional buying
  • US long bonds (TLT) short-term momentum divergence played out as expected with a nasty sell off and then a bounce off the 50 DMA on Friday
  • The Modern Family (cyclicals) improved with Semis (SMH) resuming the lead, Transports (IYT) firmed
  • Russell 2000 (IWM) is compressing in bull mode
  • High Yield debt improved versus the safety of US Bonds
  • Gold and Gold Miners and DBA (soft commodities) firmed as expected
  • The Euro (FXE) moved to a recovery mode this week