The market rally over the last 10 days has been impressive. A huge relief to investor portfolios beaten down in 2022 YTD. The question we seek to answer this week is whether the safe haven trading was all for naught? Did pessimistic sentiment get overplayed? Gold was down nearly 6.5% off the March 8 high, just as it looked ready to break out above 2020 highs! But from a trend perspective, the gold trade is still a “Go” on a weekly (and daily) basis, printing a new rally this week. Are we reverting to the growth equity leadership of 2020? For short-term traders, opportunities in tech, discretionary and even meme stocks such as $GME have been mind-blowing. And yet, Crude Oil Futures were back up over 5% yesterday
From a broader viewpoint, what would signal that the value trade is over? If the inflation trade was over, would a resource rich nation like Australia still be ripping? If markets found their base, then investors could look to load up on the strong players from the most beaten down sectors by looking for early signs of strength. From a GoNoGo perspective, Tesla has been very constructive this week so has Amazon. Yet, the durability of the commodities leaders is critical to keep in view with diversified agricultural funds such as $DBA accelerating their long-term trend and $DE John Deere catching the bid as well.