Sentiment tracker (2021)

I want to start a fresh journal to keep track of my sentiment for different assets. After determining directional bias for an asset I will seek short, medium or long-term setups for trading and investing. By eliminating one half of the trading equation I am able to more clearly focus my efforts similar to my previous thread: https://www.metalsmine.com/thread/92...rade-direction

01/13/2021

Oil - Bullish
We saw the bottom of the market not that long ago. With virus concerns easing, calls for inflation and weak USD rising we could oil continue to run up in the months to come. The market has been touting growth prospects for 2021. I'm not convinced on that angle yet considering how badly production was interrupted during the pandemic but if we do see it.. even better. Data shows that consumer demand for oil products is rising and Saudi Arabia has finally followed through on some of the promised production cuts. The only question left is, how much is already priced in?

Gold - Slightly bullish
We have to see inflation at some point right? (maybe not considering the latest CPI data..) It will be interesting to see if gold is bought on inflation like it was back in the day. 2021 could also be the year of dollar weakness which would help boost the asset.

Crypto - Slightly bearish
After the huge rally we saw I think markets will pause and drift slowly down for a while until their next jump higher. With the industry market cap between $825M and $975M it is going to take more institutional adoption to bring us higher. Early adopters are now in if they were not before now we will have to wait patiently for the not so early adopters to join in.

Bonds - Slightly bearish
While it is probably crazy to think of the Fed raising rates anytime soon we are about to be stuck in a scenario where they otherwise might like to. I won't predict what the Fed will do but the UST yield curve has shown signs of a bear steepening. This steepening comes about a year after the curve inverted coincidentally(?) before covid rocked the markets. If we see bond duration spreads continue to blow out while inflation expectations rise we should expect the bond and equity markets to suffer. This could easily lead to a baby bear market in bonds that many banks expected at the beginning of last year.

01/20/2021

Oil - Correct call but WTI is only slightly up nearing $53 from $52.60 on my previous post.

Gold - Correct call, Gold is slightly up at $1868 vs $1844 on my previous post.

Crypto - Correct call, BTC is slightly down at $34798 vs $37295 on my previous post.

Bonds - Rates rallied on the 30Y but sold off on the 5Y so this is a mixed bag. I am inclined to say I was correct here as well considering I am focused on the widening of duration spreads and steeping of the yield curve.