Gold Is Starting Its Next Bull Leg…

Remember, in life, time rather than money is the most important currency, and we all have only a finite amount of time (at least until they figure out life extension). You can win money, lose money, and earn it back again. But time is something that you can never get back, so making good decisions with the odds on your side is the best way we can give ourselves more time, or said another way—freedom.” ~ Larry Hite, “The Rule”

Good morning!

In this week’s Dirty Dozen [CHART PACK]  we look at Fund Manager Survey highlights, technical overextension in US markets, signs of the US dollar rolling over and a contrarian Buy Signal in precious metals, plus more…

Let’s dive in.

  1. The takeaways from Bank of America Merrill Lynch’s latest Global Fund Manager Survey (BAC).

  1. The SPX has risen 76% YoY from its March 20 lows, making it the 3rd largest jump in 100 years (via BofA ML) (SPX).

  1. The bank is predicting a rotation out of Low Quality ahead of peak stimulus coming in the second half.

  1. Strong breadth means the current Buy Climax is likely to keep playing out, for now. But… my base case is that we’re nearer to the end than the beginning of this move and US stocks are headed for a few months of sideways chop — as I outlined in this thread here.

Stimulus and easy Fed policy has cut off the downside risk though so I’m looking more for sidewaysish US underperformance, while Europe and EMs outperform as the USD resumes its cyclical bear.

 

  1. Bespoke Research points out that “this is the longest streak of ‘extreme’ overbought readings since January 2018.”

 

  1. Here’s the trade-weighted dollar (DXY) chart I’m watching. It’s retraced up to kiss its longer-term trendline and is now rolling back over. Chart is a weekly.

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Disclaimer: All statements are solely opinions and are for educational purposes only.

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