The Closing Look

Stocks rallied on Wednesday as the strong sector rotation we have outlined for you in recent weeks continued. On Wednesday, we saw big money flow into commodities, mainly steel, oil and gold stocks. Other sectors of the market also did well such as materials, transports, and industrials. Crude oil jumped above $51/barrel and gold prices vaulted $17 to 1264/ounce. Before the open, the World Bank downgraded its 2016 global growth forecast to 2.4% from the 2.9% forecast in January but markets largely dismissed the news. Elsewhere, the European Central Bank (ECB) began buying corporate bonds in its latest effort to stimulate markets.

Gary’s Thoughts: The “weak dollar” trade remains at hand but fair warning, the dollar is oversold with markets overbought in the near term. Pullbacks due soon! That said, lots of stuff turning corner.