Bill Gates, one of the world’s richest men and most powerful philanthropists, was the target of criticism from social justice campaigners on Sunday after arguing that lifting patent protections on COVID-19 vaccine technology and sharing recipes with the world to foster a massive ramp up in manufacturing and distribution—despite a growing international call to do exactly that—is a bad idea.

Directly asked during an interview with Sky News if he thought it “would be helpful” to have vaccine recipes be shared, Gates quickly answered: “No.”

Asked to explain why not, Gates — whose massive fortune as founder of Microsoft relies largely on intellectual property laws that turned his software innovations into tens of billions of dollars in personal wealth — said: “Well, there’s only so many vaccine factories in the world and people are very serious about the safety of vaccines. And so moving something that had never been done — moving a vaccine, say, from a [Johnson & Johnson] factory into a factory in India — it’s novel — it’s only because of our grants and expertise that that can happen at all.”

Contrary to Gate’s claims, there are facilities available to produce hundreds of millions of COVID-19 vaccines. In an industrial neighborhood on the outskirts of Bangladesh’s largest city lies a factory with gleaming new equipment imported from Germany, its immaculate hallways lined with hermetically sealed rooms. It is operating at just a quarter of its capacity.

It is one of three factories that The Associated Press found on three continents whose owners say they could start producing hundreds of millions of COVID-19 vaccines on short notice if only they had the blueprints and technical know-how. But that knowledge belongs to the large pharmaceutical companies who have produced the first three vaccines authorized by countries including Britain, the European Union and the U.S. — Pfizer, Moderna and AstraZeneca. The factories are all still awaiting responses.

Across Africa and Southeast Asia, governments and aid groups, as well as the World Health Organization, are calling on pharmaceutical companies to share their patent information more broadly to meet a yawning global shortfall in a pandemic that already has claimed over 2.5 million lives. Pharmaceutical companies that took taxpayer money from the U.S. or Europe to develop inoculations at unprecedented speed say they are negotiating contracts and exclusive licensing deals with producers on a case-by-case basis because they need to protect their intellectual property and ensure safety.

Read AP article here.

Gold gave up another 17.60 on Monday, as it struggles to gain any traction here. Gold has been in a downtrend channel since August and we need to see it break out of the tight trading range it has been in this month. Based on the Relative Strength Index (RSI) gold is not oversold at this point (RSI is highlighted at the bottom of the chart).

Subscribers to the Trend Letter are presented with our various Forecast Models, which are dynamic and are updated at the end of each week. Our Forecast Models calculate both bull and bear scenarios. Below is the updated Model Forecast for gold which was sent to subscribers Sunday.

• In both scenarios there is an immediate decline to the 1640 range, then a rally to 1800 by the end of April.
• The bullish scenario sees a decline to 1640, then a rally up to 1940 by June
• The bearish scenario would see a decline to 1640, then a rally to 1800, which would be the high, and then see a prolonged decline into early 2022

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Markets continued their decline today after Federal Reserve Chairman Jerome Powell said that as the national economy begins to reopen, “we will see inflation move up through base effects. That could create some upward pressure on prices.” While the Fed is expecting some inflation, Powell said he does not expect to raise interest rates this year until employment and inflation are back to sustainable levels.

Nasdaq

Another big down day for the markets, with the techs again leading the way down. The Nasdaq dropped another 274 points or 2.11% today  and is now trading down 164 points for the calendar year. After breaking below its 50-DMA yesterday (red wavy line), the Nasdaq has now breached its uptrend line (green diagonal line) dating back a year ago.

S&P 500

The S&P 500 lost another 51.25 points today or 1.34%. The S&P 500 broke below its 50-DMA today, which had acted as a strong support level when tested late January and late February (green arrows).

Insiders are selling

The chart below shows that insiders have clearly decided to sell shares.

Canadian equities

The TSX Index was down as well, but held up better as oil prices surged today.

Bonds

The bond vigilantes continue to challenge the Fed’s policy of low rates and dovish outlook. When investors perceive that inflation, or credit risk is rising, they demand higher yields to compensate for the added risk. The term refers to the ability of the bond market investors to serve as a restraint on the government’s ability to overspend and over-borrow. It will be interesting to see who wins this battle.  Trend Letter subscribers have benefitted handsomely with a recommendation  made in August, betting on yields rising. As we can see on the chart, that recommendation was very timely, hitting the turn within days. That trade recommendation is up 38% since August.

Gold

Gold had another rough day, down 15.15 for the day. The only optimism for gold right now is that it is now oversold technically based on RSI (bottom of chart) so we should see at least some consolidation soon, if not a bounce off these levels.

Bitcoin

Bitcoin continues to be volatile, falling below the $50,000 level today.

Oil

Oil surged to the highest level in nearly two years after closing at 62.83, up  2.55 or 4.15% after the OPEC+ alliance surprised traders with its decision to keep output unchanged, signaling a tighter crude market in the months ahead.

US dollar

The US dollar continues to gain momentum on equity weakness and capital flows, especially from Europe.  With expected increased volatility in the equity markets this year, the US dollar could see a significant rally going into 2022.

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Our model gave a recent warning of a potential market top coming soon and we sent subscribers a strategy to protect their portfolio. Below we show a few charts that allow investors to see some reasons for concern here.

The first chart shows the daily purchase and sell transactions by corporate insiders – officers, directors, and holders of more than 10% of company shares. The SEC requires these shareholders to report purchases and sells within two days of a transaction. As we can see on the chart, during the massive sell-off in February and March, insiders were big buyers of their company’s shares (pink circle on blue line). But now in this record setting rally in November, corporate insiders have been massive sellers of their company’s stock (pink circle on red line) .

On the second chart we see CNN Fear & Greed Indicator. This indicator combines seven real-time market indicators to assess current investor mood. Of those seven indicators, six have reached “Extreme Greed,” levels, which is typically indicative of at least a short-term market top.

As investors we need to be aware that this transfer of shares from strong insider hands to weaker retail investors is a warning that we could be in for a correction very soon.

Our models monitor these and many other indicators, and are they have given us a warning signal that we could see a top here in the next 10 days. At the beginning of the year our model forecast the S&P 500 would reach 3600 by the end of 2020; well we have now achieved that target.  Over the next 10 days we have a target high of 3740 for the S&P 500, and our first support level is 3600. A drop below 3600 warns of a steeper decline, with further support targets at 3462, (the 50-Day Moving Average ((red wavy line)), then 3220 ((green horizontal line)), and then the 200-DMA at 3152 ((blue wavy line)).

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According to data compiled by LPL Financial,  historically the S&P 500 averages its highest return of the entire year on October 28th. Well, that certainly was not the case today, the markets got hammered.

There were many factors contributing to today’s slaughter, and leading the way were fears related to soaring coronavirus case numbers, especially in Europe, followed by Trump’s apparent acknowledgement that a stimulus package won’t be passed prior to the election. And then of course there is the election itself.

The S&P 500  – dropped 119 points or 3.53%.

The S&P 500 has fallen through its 50-DMA (red wavy line) and is approaching near-term support at 3220. The 200-DMA (blue wavy line) will be a key test of support. Note at the bottom of the chart, the Relative Strength Index (RSI) is at 35.21, not yet in oversold territory.

Gold – down 32.70 or 1.71%

Gold also took it on the chin as fears of the global economy falling into a deeper recession or even a depression suggest deflation, not inflation. Deflation is not gold’s friend. Gold remains in it near-term downtrend channel and will need to break out of it before we can start thinking of a breakout.

Oil – down 2.18 or 5.51%

Oil also got smacked and is close to testing near-term support at 36.80

US Dollar – up .48 or .52%

When investors get spooked they look to safety, and the $US is the safe haven currency.

Interesting chart comparing US service sector to the Euro Area. Those who think the Euro will outperform the $US need to have a good look at this chart. The gap between these two economies is now at the widest it has been since the Euro crisis in 2012.

Stay tuned!