Weekly Market Update: Russia War Heats Up; America’s Doctor MIA

Well, last week I said to watch prices. This week, we saw prices explode higher, in virtually all of the commodities I track:

• Gold: +84.30 [+4.27%]
• Silver: +1.57 [+6.06%]
• XAU: +12.11 [+7.81%]
• Palladium: +626.27 [+26.97%]
• Crude: +21.76 [+19.22%]
• Copper: +0.43 [+8.76%]
• Lumber: +100.84 [+7.76%]
• USD: +2.15%
• EUR: -2.99%
• 10-year; -27 bp [to 1.70%]

Risk assets moved lower:

• SPX: -55.78 [-1.29%]
• JNK: -1.34%

Put simply, money fled Europe, to the buck, and into the 10-year, and – even more intensely – into commodities.

This week I’ll use gold/Euros. Given the very strong dollar rally this week, we need to add the big EUR/USD decline to the gold/USD rally to see what happened to gold/Euros. That adds up to a monster +7.67% weekly move for gold/Euros. You can see it below – gold/Euros broke out to a (checks notes) NEW ALL TIME HIGH this week. Wow. Big Money across-the-pond isn’t playing around.

Crude saw an even bigger move – up $21 to a new 11-year high. Another few pennies – we’d be looking at a 13-year high. This was an absurdly large move – the 4th largest weekly move on record. (The others: April 2020, Aug 1986, and Jan 2009). Anyone short got their clocks cleaned. I got an email from my broker talking about margin increases for crude oil futures. For me: now is the time for low stress trades. This is just too crazy. Even one single QM (500 bbl) crude future short would have resulted in a $10,500 loss this week. How many traders were blown up by this move? No idea.

And palladium – I already mentioned it was a monster move; the 5th largest weekly move on record. Notice the close right at the highs. That’s not a “peace is coming soon” indicator.

Copper broke out to a new all-time closing high on Friday also.

And here is the 10-year treasury. Look at the -27 bp drop, and that bearish reversal candle. What’s that about? Rumor has it, the Fed won’t need to raise rates, what with all the chaos from “war with Russia!” going on. That, or, the increase will be just a one-time 25 bp increase March 15. That’s the theory anyway – money racing back into bonds due to the Fed hinting at deciding not to raise rates much at all. Unlike their position from two weeks ago.

Isn’t war awesome? “Don’t raise rates in mid-stream.”

Finally, risk assets – equities. My model sees