Equities: choppy near All-Time Highs, US Dollar: weaker, commodities: smoking hot!

The S+P 500 index chopped up and down within a narrow range this week after surging ~9% the previous four weeks. Implied volatility was also choppy day-to-day, but it was close to one-year lows at the end of the week – a sign of complacency.

My view the past couple of weeks has been that the market is, once again, “priced for perfection” and is at risk of (at least) a mild correction sometime within the next few weeks. I’ve taken small, limited-risk positions in anticipation of a correction, but I’m wrong on that call so far. I’ll discuss my trade timing in the Trading section below.

The major stock indices have had spectacular rallies since the panic lows made in March last year. The S+P is up ~90%, the Nasdaq 100 is up ~110%, and the small-cap Russell is up ~135%. Last week I noted that the rally had been in two roughly equal parts, 1) March 2020 to November 2020, and 2) November 2020 to now.

What drove the rally?     CLICK HERE