Q1 Market Outlook: Reflation Pause

The copper/gold ratio is used as a barometer for risk-on versus risk-off. The ratio is now testing long-term resistance, which could signal a pull-back in the reflation trade.Equities are still preferred over bonds, especially given a series of relative breakouts in the SPY/TLT ratio. However, it appears that long-duration bonds are deeply oversold, which means Treasury yields could recede over the short-term. US growth stocks are oversold versus value stocks, but the broader uptrend is shifting downward. For now, upside appears limited for momentum stocks, particularly concentrated in the tech sector. Healthcare and biotech, although lagging in terms of relative strength, have held support on shorter time frames.The broad commodities complex has reached our initial upside target (similar to the late 1990s in the Dow Jones Commodities Index). Downside should be limited amid seasonal weakness, and we expect the global economic recovery to keep buyers active at lower support levels. Learn more about our managed account offerings at www.dantesoutlook.comAnd stay tuned for a special guest interview later this month. The information presented is for informational purposes only and should not be considered as investment advice nor as a recommendation of any particular strategy, allocation or investment product: before making any investment decision, you should seek expert, professional advice and obtain information regarding the legal, fiscal, regulatory and foreign currency requirements for any investment according to the laws of your home country and place of residence. Investing involves risk, including the possibility of loss of principal. Any forward-looking statements or forecasts are based on assumptions and actual results may vary from any statements or forecasts.Visit us at www.dantesoutlook.com