- Moving the markets
Just like yesterday, climbing bond yields kept a lid on bullish sentiment, as the major indexes bounced around their respective unchanged lines before sauntering into red territory, where they closed with minor losses. The S&P and Nasdaq erased yesterday’s gains and never saw “green” during this session.
There was no apparent driver on deck to keep the bullish theme intact and—despite traders looking beyond the banking crisis yet recognizing that on one hand the economy still shows some resilient growth but on the other could easily be pushed into a recession—buyers remained conspicuously absent.
Regional banks took a dive, as hearings in Washington on bank failures offered nothing but more regulation, more laws, tighter credit, and no bailouts, as ZH reported. As a result, the regional banking index KRE dropped again, thereby wiping out yesterday’s rebound.
The US Dollar continued its 3-day down trend, which helped Gold to gain +1.06% on the day, as the precious metal found support at its $1,950 level.
2. “Buy” Cycle Suggestions
For the current Buy cycle, which started on 12/1/2022, I suggested you reference my then current StatSheet for ETF selections. However, if you came on board later, you may want to look at the most recent version, which is published and posted every Thursday at 6:30 pm PST.
I also recommend you consider your risk tolerance when making your selections by dropping down more towards the middle of the M-Index rankings, should you tend to be more risk adverse. Likewise, a partial initial exposure to the markets, say 33% to start with, will reduce your risk in case of a sudden directional turnaround.
We are living in times of great uncertainty, with economic fundamentals steadily deteriorating, which will eventually affect earnings negatively and, by association, stock prices.
In my advisor’s practice, we are therefore looking for limited exposure in value, some growth and dividend ETFs. Of course, gold has been a core holding for a long time.
With all investments, I recommend the use of a trailing sell stop in the range of 8-12% to limit your downside risk.
3. Trend Tracking Indexes (TTIs)
Our TTIs recovered a fraction, with the Domestic one again positioned in striking distance of breaking above its trend line.
This is how we closed 03/28/2023:
Domestic TTI: -1.01% below its M/A (prior close -1.20%)—Buy signal effective 12/1/2022.
International TTI: +4.29% above its M/A (prior close +3.57%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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