If you would have told me in September that the Dollar would fall apart over the next 2 quarters, I would have told you that precious metals are likely doing well in that environment. I would have also said that Silver would outperform Gold during that period.
In this case I would have been absolutely right.
Great.
But what I would have also been confident about is foreign equities doing well in that weaker Dollar environment.
And while I would have also been correct in that guess, I would have definitely told you that it would be Emerging Markets outperforming, not Developed Markets.
And that would have been very wrong.
It's been the Developed Markets outside the U.S. that have been dominating the equities markets over the past couple of quarters. Look at the performance of these assets since the Dollar peaked:
In bull markets you regularly see more and more stocks making new highs.
That's just a normal characteristic of this type of market environment.
Yesterday we saw a ton of stocks making new 52-week highs - names like Nvidia, AstraZeneca, Salesforce, Lockheed Martin, General Electric, Chipotle, Autozone, Motorola, Lennar and many others.
However, in aggregate we have yet to see that key breakout in breadth expansion in the new 52-week highs list.
The new lows list is non existent. It's been that way since the 4th quarter last year.
Throughout the call we discussed how we want to continue to profit from this raging bull market in stocks.
The list of participants in this bull keeps getting longer, not shorter. We're seeing more and more stocks going up, more sectors and more countries around the world participating to the upside.
Just because some (most) investors choose to ignore it, doesn't mean that moves in stock prices are random.
They're not.
Stock prices trend.
It's just math. Or science maybe. Or both, I don't know.
But they do trend. This we know is a fact.
And since last June, the majority of stocks have been appreciating in price. And very few stocks have been falling in price, to the point where there are almost no stocks that are still falling.
So if stocks were not going up in price in this environment, that would be really weird.
You're seeing the permabears pointing to the Equally-weighted S&P500 falling down towards new 52-week lows relative to the Market-cap weighted version.