Stocks Give Thanks For Fed Liquidity As Dollar, Gold, & Bitcoin Dumped

Source: Bloomberg

...closing at its weakest vs its fiat peers since April 2018 (and unchanged since Jan 2015)...

(Click on image to enlarge)

Source: Bloomberg

Cryptos started the week strongly with Bitcoin closing at a record high but ended weak with ETH flat and BTC -10% (and yes Ripple was up 140% on the week on Tuesday!)...

(Click on image to enlarge)

Source: Bloomberg

Bitcoin fell from $19500 to $16500...

(Click on image to enlarge)

Source: Bloomberg

On the week, copper and crude surged as PMs were purged...

(Click on image to enlarge)

Source: Bloomberg

Gold and Silver were monkey-hammered this morning (coinciding with a forceful flash-crash in VIX)...

(Click on image to enlarge)

Gold is heading for its 3rd straight weekly decline, its 4th straight monthly drop, and worst month since Nov 2016, breaking (and closing) below its 200DMA...

(Click on image to enlarge)

Source: Bloomberg

Finally, some historical context from Michael MarkowskiTwo stock market sentiment anomalies have increased the probability of a correction near term.

The two anomalies are:

  • Thanksgiving Melt Up Anomaly. The average S&P 500 gain for 12 of the past 14 ten-day periods concluding November, was 3.5%. The only two exceptions, 2015 and 2018, were preceded by significant market corrections.
  • Bullish Sentiment Anomaly. Currently, there is a high probability for the S&P 500 to decline by 12.7%. Such would be from its recent 2020 high and would conclude by December 20, 2020. Based on the previous behavior, there is a 66% probability the S&P 500 could continue its decline in 2021.

The Thanksgiving Melt Up Anomaly is now driving the S&P 500 to a higher November all-time high.

The Bullish Sentiment Anomaly is the cause of a violent correction for the S&P 500 to begin in early December 2020.

The chart below depicts the four 45% to 59% Bullish sentiment readings which occurred near the all-time highs for the S&P 500. (2018 to November 13, 2020)

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