Investing.com | Feb 08, 2021 07:13AM ET
US contracts on the Dow, S&P, NASDAQ and Russell 2000 rallied on Monday following pace of US inflation implied by the bond market accelerated to the fastest since 2014.
The 30-year yield extended an advance after crossing the 100-week MA and pressing against the top of a rising channel. Rates could fall back to 1.9% within a rising channel, before continuing higher.
Treasury Secretary Yellen’s remarks emboldened reflation bets, increasing dollar demand and paring Friday’s selloff.
Dollar bulls may have taken profit after the jobs data as the price neared the previous trough, registered on Sept. 1, where the 100 DMA just so happened to show up.
That long position unwinding creates a return move after a pattern’s breakout, or in this case, two patterns: the small H&S and the massive falling wedge, within the rising channel since the Jan. 6 low. We expect the dollar to continue climbing.
The anticipation for reflation and the bullish market outlook makes gold an unattractive investment, both as an inflation hedge and as a haven.
Bitcoin pared Saturday’s slight decline.
The price is struggling against the Jan. 8 record, while the bullish flag suggests a new one up ahead. Caution: the declining volume provides a negative divergence to the rising price.
Market expectations that the coronavirus vaccine will allow economies to reopen, and that any stimulus will revive spending helped oil develop a rising gap of 0.8%, its fourth rising gap in a row, within a six-straight rally.
At around $57.50, oil reached its highest since Jan. 21 and is close to our target of $60.
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