- Moving the markets
The stock market kicked off the week with a bang, as tech stocks bounced back from their recent slump. Tesla was the star of the show, soaring more than 9% after Morgan Stanley gave it a thumbs up and predicted a big rally ahead, thanks to its self-driving software. Maybe Elon Musk can finally afford to go to Mars now.
The bulls were also encouraged by a Wall Street Journal report that said the Fed was in no hurry to raise interest rates at its next meeting. That’s good news for the market because higher rates could spoil the party. But don’t get too comfortable because inflation is lurking around the corner.
This week, we’ll get the latest readings on consumer and producer prices, which are expected to jump due to higher energy costs. Investors are hoping for some low numbers, but they might be disappointed. Will inflation force the Fed to change its mind and tighten its policy sooner than expected? That’s the million-dollar question.
Today, there was no major news to move the market, but there was still some action. The Magnificent Seven (Apple, Amazon, Facebook, Google, Microsoft, Netflix, and Tesla) continued to defy gravity and rise despite higher bond yields. The 2-year yield briefly hit 5%, but then retreated. The Nasdaq led the way and outperformed, while the Dow and Small Caps gave up some early gains, but the S&P held steady throughout the session.
The Dollar had a bad day and dropped to its lowest level since February. Oil prices dipped slightly but remained near their recent highs. Gold swung back and forth but ended up with some gains.
What’s next? We have a busy week ahead, with CPI, PPI, Retail Sales, Triple-Witching OpEx (Options Expirations), and The Fed on the agenda. And don’t forget about the VIX, which is entering its seasonally strong period. Things are about to get very interesting indeed.
Are you ready for some volatility?
2. “Buy” Cycle Suggestions
The current Buy cycle began on 12/1/2022, and I gave you some ETF tips based on my StatSheet back then. But if you joined me later, you might want to check out the latest StatSheet, which I update and post every Thursday at 6:30 pm PST.
You should also think about how much risk you can handle when picking your ETFs. If you are more cautious, you might want to go for the ones in the middle of the M-Index rankings. And if you don’t want to go all in, you can start with a 33% exposure and see how it goes.
We are in a crazy time, with the economy going downhill and some earnings taking a hit. That will eventually drag down stock prices too. So, in my advisor’s practice, we are looking for some value, growth and dividend ETFs that can weather the storm. And of course, gold is always a good friend.
Whatever you invest in, don’t forget to use a trailing sell stop of 8-12% to protect yourself from big losses.
3. Trend Tracking Indexes (TTIs)
The U.S. stock market began the week on a positive note, with the Nasdaq leading the gains despite rising interest rates. The Nasdaq Composite outperformed the Dow Jones Industrial Average and the S&P 500 Index.
Our trend tracking indexes (TTIs) also advanced slightly, indicating continued bullish market sentiment.
This is how we closed 09/11/2023:
Domestic TTI: +1.46% above its M/A (prior close +1.30%)—Buy signal effective 12/1/2022.
International TTI: +3.58% above its M/A (prior close +2.66%)—Buy signal effective 12/1/2022.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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