Soft Commodities Firming

The US Equities market 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 it's 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

For this week's video click below.