The week 08.03 – 12.03.2021

The US economy, businesses, and individuals, including investors, live with the hope of being saved by the government. It is planned that $1tn out of the $1.9tn stimulus package will end up directly in citizens’ pockets. As a result, markets climbed to new highs: The S&P 500 closed the week at an all-time high. We observe, that in the last 30 years, 140 all-time highs were reached on a Friday at the closing bell. Thereafter, the S&P 500 continued to climb in average in almost all observation periods. The new US government promised not to let the population down and to jump-start the economy with big money injections. The good news on the Covid-19 front is helping to brighten investor sentiment, who are willing to take more risks. The Volatility Index (VIX), which measures the prevailing fear in the market, declined by about a third to its lowest level in a fortnight. Nevertheless, the VIX is 3.60% higher than during the previous all-time high, which was on the 12 February this year. This signals us, that despite some euphoria, the market is not in a frenzy. The winners of the week were once again US T-bonds with +2.70%, followed by the S&P 500 posting a gain of +2.57% and Gold, which was up +0.87%. Oil was the loser of the week, down -1.60%. Except for delivering long signals throughout the week, we had one short signal on Monday. This led to a gain of almost 2.50%. Traders following ONE SIGNAL returned 9.34% YTD, compared to 4.75% for investors who bought and held S&P 500 at the beginning of the year.