Follow the North Water

"The North Water" refers to a fictional voyage of a whaling ship in the 1850s, which is the setting of Ian McGuire's novel and subsequent BBC/AMC miniseries of the same name. The "north water" specifically refers to the North Water Polynya, an area of open water in the Arctic where whales migrate, making it a crucial hunting ground for whalers (As an aside, I highly recommend the mini-series). 

The current melt-up in equities reminds me of the whalers on board their ship making their way up to the north water to catch the big prize. We know this melt-up ends, unless this time truly is different, with the rally on historical ground now given the streak of Nasdaq closes above the 20-day moving average.

And we also know the massive speculative fervor and meme stock squeezes are likely signs of froth about to unravel, on top of the expensive valuations for tech/growth stocks. Onboard the ship we have all types of shenanigans and mishaps. But they are not being properly punished yet, or anything close to it. 

However, as the voyage carries on the odds of the comeuppance rises dramatically. 

As far as a late-July week goes this one is as busy as any--Tons of major earnings (AAPL AMZM META MSFT, among many others), GDP, jobs reports, PCE, and of course the FOMC on Wednesday. The Trump/EU news from the weekend already feels like old hat, as equities are off session highs and drifting as I write this. 

On a separate note, even with gold, silver, and precious miners pulling in today we have Palladium, once again, standing out. On the PALL ETF daily chart, below, note the bull flag still forming after the latest rally. Today's bounce is a clear sign of relative strength to peers.