Top & Worst Asset Performers For The Week Of 12/9/19

Intermarket analysis is a powerful tool that gives traders/investors a macro predictive direction of stocks, bonds, commodities and currencies. Intermarket analysis states that all asset classes are interrelated and that you can’t definitively determine the direction of one asset class without examining the other asset classes.

There are several key relationships that bind these four markets together. These relationships include:

The INVERSE relationship between commodities and bonds. The INVERSE relationship between bonds and stocks. The POSITIVE relationship between stocks and commodities. The INVERSE relationship between the US Dollar and commodities.

The overall goal of the intermarket analysis is to identify top performers or the markets that are outperforming others. With all that said, the top and worst performers from this past week are the following:

Top Performers

Coffee: 4.89%

Top coffee supplier Brazil is running out of reserves, reaching levels not seen since 1962. Record worldwide demand is also contributing to low inventories. The supply and demand equation is not balance because years ago, when coffee prices were low, countries didn’t make investments to grow coffee.

Soybean Oil: 4.42%

Platinum: 3.33%

Platinum prices hit $1,900 this past week and is up 60% year to date. South Africa is the world’s largest producer of platinum, producing about 66% of the world’s platinum. Thus, part of the catalysts has been is power outages in South Africa where mining production have fallen for a third month in a row. On a side now, South Africa also produces about 40% of the world’s palladium which is used in car exhausts to control emissions.

Worst Performers

S&P 500 VIX: -7.33%

Details emerged Friday from the U.S.’s first-stage trade deal with China, which marked a milestone in President Trump’s initiative to rebalance trade with Beijing but left questions over how far it goes to level the playing field for U.S. businesses. The limited agreement, capping months of sometimes-testy negotiations, calls for China to purchase more products from American farmers and other exports, U.S. officials said. In return, the U.S. put the brakes on new tariffs set to take effect Sunday and agreed to reduce some existing levies. Both sides termed it a “phase one” deal and said negotiations would continue on remaining issues.

<a href=”https://www.wsj.com/articles/us-china-confirm-reaching-phase-one-trade-deal-11576234325”>Source

Bitcoin: -2.61%

Above price, there are sellers at two levels and a major support/resistance line at $8000. So if price is going to move higher, the buyers better bring in back up. Below price, the daily demand at $7000 has been used, up meaning no more unfilled buy orders at that level. Thus, price could continue to fall...potential next stop is $6000.

Sugar: -1.71%

If the momentum this week continues into next week, look for price to test $14.00.

See you next week.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.