Morning Outlook – 4/16/2021

April showers are supposed to bring May flowers, so does that count for four inches of snow this morning? Living in the Rocky Mountains has its strange moments.

I will put out more details over the weekend, but the Navigator Swing Strategy remains 90% in cash and 10% in Gold. We were so leveraged (and made so much money) coming up to the old highs in both indexes, that we have not felt compelled to jump back in as yet. 

The Gold was a contrary play that appears to be paying off. There has been a subtle shift to risk-off assets in the past 48-hours. Treasury bonds rallied inexplicably yesterday – given we were coming off the highest consumer inflation reported in the past 10 years. If one turns their attention to Ukraine, perhaps the Russian troops mounting on the border could explain the rise. The US is telegraphing a lot of weakness right now to China and Russia. I would not be surprised to see both countries move on Ukraine and Taiwan simultaneously.

Meanwhile, back at the day screens, keep the macro picture and the pending nominal 18-month cycle peak in mind. The back-to-back overnight patterns and continual new all-time highs tell us that momentum buyers remain firmly in control. Don’t fight it – do what works until it doesn’t.

The overnight lows are weak. Should they be tested, assume the potential for lower price action and monitor for continuation. Then think sequentially in terms of key signposts.

I don’t trade Fridays – but best wishes for a prosperous day.

A.F. Thornton