Top And Worst Asset Performers For The Week Of 3/16/20
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
S&P 500 VIX: +37.13%
The VIX measures the volatility over the last 30 days on the S&P 500. Also known, as the fear gauge, VIX values greater than 30 represent risk off trading environments and VIX values less than 20 represent calm Markets.
Stocks wiped out earlier gains today and closed lower on Friday and the week. The S&P 500 was down almost 15%, it’s worst week since 2008. Despite massive stimulus by all governments in the world, the world has no idea how many people will be infected at the peak and how bad the economy is going to get at its worse.
Bitcoin: +17.73%
Every central bank around the world, including the major ones like European Central Bank and US Federal Reserve are cutting rates and issuing stimulus package. As a result, fiat is become less and less valuable, except for the US dollar. People are scrambling for any type of save haven. If our monetary system collapse, cryptocurrencies will be favored. The king of cryptos, Bitcoin, which is finite, after hitting a low of $4500, surged for the week.
Coffee: +12.13%
Worst Performers
Gasoline RBOB: -31.02%
Crude Oil WTI: -26.16%
Crude Oil Brent: -18.29%
Oil prices fell on Friday after rising 10% in the session as the coronavirus epidemic knocked the outlook for demand and Moscow rejected an intervention by U.S. President Donald Trump in Russia’s price war with Saudi Arabia.
“The world is awash with oil... Simply put, oil is facing a prolonged period of demand destruction,” said Stephen Brennock of oil broker PVM.
Brent and U.S. crude have both collapsed about 40% in the past two weeks weighed by the spread of the virus and the collapse of coordinated output cuts by producers from the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia.
Trump said on Thursday that he would act on the price war at the appropriate time, saying low gasoline prices were good for U.S. consumers even though they are hurting the industry.
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.
Posted via Steemleo