We want to examine how some of the hot sectors for 2021 we identified in late December are presently performing. Our broad market call was for a top in mid-December that would remain elevated into late December until year-end tax selling occurred – this latter piece did not unfold as anticipated. Fed intervention kept markets elevated into last week when the dam finally broke. SPX has not gained any traction but has not declined. Gold Members know this decline is inevitable and are already positioned for a sharp rise in volatility.
Steel is preparing for a correction after a strong start, but should resume its upward trend.
Metals spiked to start the year but have since stalled. We forecasted this for our Gold members indicating a top January 4-8 and a decline into the coming weeks.
We remain long a wheat trade for our Gold Members and the sector has not disappointed.
The energy and oil services sector has exploded since our late December call.
Semiconductors have outperformed the broad market to start 2021 as hot money flowed into this space.
Concrete, as highlighted in our late December weekly briefing, has also exploded to start 2021.
In closing, the broad market has made minor gains to start the year and is in the process of rolling over, but leading sectors for 2021 have strongly outperformed it with new hot money being deployed to start the year. We expect a broad, swift correction in most stocks and commodities in the days ahead providing another great entry point into May of 2021. Investors should be focused on raising some cash.
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