 Folks, welcome to the week ahead commentary podcast. This is Bob Desmond recording from our Contrarian Trading Studios in New York. What we're gonna talk about this week are our views of how we close out the week on the major averages. Then we're gonna segue over to into our positions, how we stand with those trades, will we add, will we sell? Then we'll focus in on our focus stocks, those stocks that we find most attractive going into the new trading week. And if you want the full video experience of the week ahead commentary, become a member, 14 day free trial offer. Join us in our new members slack community. And I look forward to engaging with you there. Let's get started. Okay, folks, welcome to the week ahead commentary. Let's begin as we normally do with the bond market. Then we will kick it over to equities. And then we'll talk about positions and watch stocks for the new coming week. As we proceed into the weekend, we have no stimulus deal. The powers that be in Washington, DC on both sides of the aisle, this is not a partisan comment, are unable after all the trillions of dollars of bailouts for industry are unable. Whether you agree or disagree with providing a check to folks that are devastated, absolutely devastated by COVID, they're unable to come up with 600 bucks per individual. So with each passing day, it just becomes more and more apparent that the two tier society, the haves and the have nots, forget the middle class of being wiped out, the haves and the have nots are being balkanized and it's a very scary prospect. So as you proceed into the new year with no deal on the table, we need to remember why the stock market has been going up. It's on the hope of a deal. It's the hope of more bond buying out of the Federal Reserve, but there's a problem. That bond buying is supposed to result in yields declining or at least holding firm. They're not, they're moving up. Take a look at this chart of the TLT, 20 year bond ETF. We broke out last week, excuse me, the week prior only to fail to hold that breakout last week. So when you get this a breakout point failure more often than not, this is now the second time that this has happened. It happened back here. We broke out the week of the 16th, failed to hold, retraced all the way back down to the lower band of support. It held. Same thing happening here again. Normally what'll happen is we'll retrace back down to the lower band of support. What does that mean moving into next week? Yields, this is the 10 year yield, will probably move up higher. We will probably see a one handle on the 10 year yield by the new year. Now you may be saying to yourself, that's no big deal really, I mean it's a one handle. Well, keep in mind folks that we went from over the past less than four years, 20 trillion in debt to 30 trillion in debt. That means that as the 10 year yield rises, the interest payments alone, forget about principle, interest payments alone, rise dramatically on that massive mountain of debt and we can't afford it. So at what point does the stock market buckle? Is it 3.24% when the market started buckling or later on in 2019 when we hit a two handle and the stock market began to buckle? When is it? What's that point? Is it one and a half? Is it one spot nine? That target is a declining target. The point at which the equity market is able to withstand higher yields is dropping significantly. We don't know where that price is but the equity market may be sending us signals right here right now giving yesterday's price action. And we could say it was triple witching. That was the cause for yesterday's volatility maybe. Or our traders looking at this chart, the one that we're looking at right here right now, nobody else is talking about and seeing that the 10 year yield is getting ready to rip up higher. Take a look at the RSI, higher lows, stokes breaking out. This is my number one concern about being long of equities moving into the new year by far. The tips. New all-time highs last week, volume dropped off. These are treasury inflation protected securities, commodities. We're gonna be talking more about the DBC. This is the overall commodity basket. And you could see that we are just ripping up higher here. Last week up three spot one six percent. As commodity prices rise, what happens to the input cost of producers? They go up as well. Does that cost get transferred over to the consumer to pay as measured by the CPI? It should. So inflation is on the rise and the tips are telling us the same thing. We're at all-time highs. The US dollar weekly chart. We failed to close above 90. We came close, no cigar. This is significant. In all probability, we are going lower here, daily chart. They attempted to rally it yesterday. Well, they did rally it, but they couldn't rally it above the 90 mark. Now, taking a look at these stokes, we may get a continuation move higher here. Ultimately, I think it fails and the dollar moves lower. The VIX, bearish reversal bar on the week. So no great shock to hear me say that in all probability, we're going to see a move higher in equities, at least the S&P 500 this coming week. Bearish reversal bar on Friday. We were up, failed to hold gains, closed down, but we did hold support. So be careful with getting net short this market in advance of the new year. The Dow transports down over 3.25% on the week, but we closed off the lows of the week. Volume, light. Everything's extended here. Stochastics extended, lower highs. MACD, the histogram is just really falling off of a cliff. The Dow Jones weekly chart. We did put it in a new all-time high last week. We held the 30,000 mark. Volume rose. Ultimate oscillator trending higher. MACD histogram flattening out. Losing momentum, but given seasonality, the path of least resistance remains higher for this index, daily chart. A down day yesterday. You really can't use the indicators all that much here because all we're doing is consolidating and these momentum indicators get skewed. Look at the volume yesterday. This is the biggest down volume bar since March. Huge. The S&P 500 weekly chart, new all-time highs on the week. The breakout on RSI has been confirmed by pulling back, validating, retesting the breakout point, now moving up higher. It looks as though they're gonna move it up higher next week, volume good, daily chart. Down day yesterday by about a third of a percentage point on massive volume. Highest volume to the downside since June. IWM weekly chart, very extended weekly timeframe. We saw some selling pressure yesterday. Some heavy selling into the close yesterday. Volume was good on the week, but we're gonna drill down here to a daily chart. Barrage, key reversal yesterday. After putting in a new all-time high. Big volume, highest down volume bar since September. And just to show you the selling pressure into the close, we use a 15 minute chart. And not much of a bounce back versus what you saw on the large caps. So we'll probably rally on Monday. May put in a lower high, watch for a break to a new lower low and we may add to shorts. Look at this volume. Tremendous volume in the final 15 minutes of trade. And talk about a tug of war on volume which is a doji star formation, a sign of indecision. I think they'll rally it early on Monday. But the question is, do we break out or do we put in a lower high and then roll over? The test is always at the top. The banks, weekly timeframe, they've stalled here. Now, the Federal Reserve has granted the banks or certain banks anyway, authorization to begin buying back shares, have no doubt that's what they'll be doing. I'll dig up the name of those banks or the names of those banks. Take a look at the MACD histogram really dropping off of a cliff now. Not much by way of big price action on the week in terms of the share buyback. Maybe it's because it came late in the week. Let's see what the price action was on Friday. Breakout point failure. We broke out on Thursday. We broke down on Friday. Look at this, look at these stokes. Talk about a tell. They get the authorization to buy back their own shares yet they're weakening. The trip cues, weekly chart, new all-time highs on the week. That choppy action I referenced a couple of weeks ago has been resolved. We've put in higher highs now. Clean breakout on ultimate oscillator. RSI, same deal, stokes, same deal. We'll probably move up higher here. Daily chart, down day yesterday, along with everything else. Lower high RSI, but we're still trending up and putting in higher lows. We're not ready to go adding to shorts quite yet. Volume rose, this is a second distribution bar in December. The technology sector, new all-time highs. This is the XLK. Indicators still look strong here, folks. Path of least resistance remains to the upside. The fly in the ointment is volume. Volume was horrible last week, but given the abbreviated week, given the holidays and the fact that you have all of these Wall Streeters, they are over in stade. They are over in Aspen. They are skiing. They don't want to be bothered with the market sell-off. The computers are in charge. They will keep these markets moving up higher. Daily chart, down day yesterday, how is volume? Rows to above average. The semis, weekly timeframe. Very extended. We had a reversal bar the prior week, inside bar this week. I have to say, I think that they'll probably push it up higher, push them up higher again. Volume is very light. Look at the MACD histogram. Really losing momentum. I am not getting the warm and fuzzies about Q1, at least the first month and second month of 2021. Daily chart semis. We have a lower high here. It's not a double top. Until such time as we break down below, 210 spot, 401, lower highs across the board on our indicators, RSI, stokes, a mess on stoke RSI, volume rose to the downside, daily timeframe, semis are under pressure here. But again, the computers are in charge. Very light volume. They can keep these markets moving up higher. LEBU broke out. I mean, what a move. Volume atrocious. Very extended relative to the 3D Bollinger Band. We're gonna get a poll back here soon. Daily chart. The LABD may be an interesting trade. That's the short ETF of the LABU versus the LABU, I should say. Not quite yet though. We're holding support, consolidating sideways, of volume dropping off. MACD histogram losing momentum. Let's check out the LABD dropping like a stone. Massive volume. Daily chart. Our last lower low was on the 14th of December. So might we be basing here? Sure. I'm not ready to pull the trigger on this yet. Energy. So I think we need to get prepared for some additional tax laws selling here on energy. A very poor week last week down a 4% volume rose. But with this comes opportunity. I would like to buy back our ExxonMobil, especially for the dividend capture. I'll have to check and see where the ex-dividend date is or when the ex-dividend date is and I'll share that with you. I'll put it in the forum. Let's go to a daily chart. Yeah, it looks as though we're probably gonna put in lower lows here. No guarantees, of course, but we are seeing lower highs on stokes. Now lower lows, $38 per share on the XLE to 36. Those are interesting price points to me. Volume on Friday rose. Oil, weekly timeframe, huge week last week. Up over four and three quarters percent. Yet energy pulled back. So I think that speaks to tax laws selling. Volume is dropping off consecutively here. So if we see a weakening up of oil, which the chart doesn't imply to be honest with you, if we see a weakening up of oil, excuse me, we may see a pullback even further on energy. Usually they trade in tandem. Gold, a breakout last week. We hit 1900 last week. We couldn't hold it. We did fade a little bit, no big deal. Volume was a bit meh, was below average. Not wonderful. Daily chart. Daily chart, we saw an inside day yesterday. No new high, no new low. I think the path of least resistance has changed with gold from being down to a sideways consolidation to now being a resumption of the bull rally, especially as we proceed into a seasonally favorable period of time. We've been talking about seasonality for months now with regards to gold, the miners. We have been very deliberate with adding to positions. We added right on weakness. Now they're beginning to come back to life as they should as we proceed into a seasonally favorable period of time, which is January. So get ready, buckle up. I think we're moving a lot higher here. For those that are listening on the podcast, this is where we segue over and into our discussion of our positions and we'll do a deep dive into our watch stocks for the new trading week, where we discuss price targets, stop loss points, and entry points. So if you're not currently a member, please head over to the website, use that link below. Or if you're listening on iTunes or Google Play, go to thecontrariantrader.com and sign up for one of our memberships, 14 day free trial offer canceled at any time and get the full video experience of the entire the week ahead commentary, as well as the discussion regarding our positions and our watch stocks for the new trading week. And please join us in our new Slack forum. Introduce yourself and let's have a discussion.