- Moving the markets
The market was in a good mood today, thanks to the tech sector’s strong performance. Apple led the way, gaining 3.3% after getting a thumbs up from Bank of America. The iPhone maker shrugged off a recent downgrade from Wells Fargo and had its best day in over eight months.
Meanwhile, the job market remained tight, as the latest data showed fewer people filing for unemployment benefits than expected. The 10-year Treasury yield rose to 4.14%, reflecting the economic optimism.
However, not everyone was happy. The Fed’s Raphael Bostic said he expects the central bank to start cutting rates in the third quarter, which is sooner than he previously thought, but slower than what the market wants.
The Senate also did its part, passing a bill to avoid a government shutdown. This sparked a buying frenzy in stocks, especially on the Nasdaq, which outperformed the other indexes. The MAG7 stocks (Microsoft, Amazon, Google, Facebook, Netflix, Tesla, and Apple) reached new heights, while the most hated stocks continued to suffer.
Other markets also saw some action. Bond yields climbed higher, the dollar stayed flat, oil prices rose over 2%, and gold bounced back from the $2k level.
But here’s the catch. The S&P 500 and bond yields are both at one-month highs, which is a rare and risky situation. It looks like an alligator’s mouth that could snap at any moment.
Will the market bite the bullet or dodge the bullet?
2. Current “Buy” Cycles (effective 11/21/2023)
Our Trend Tracking Indexes (TTIs) have both crossed their trend lines with enough strength to trigger new “Buy” signals. That means, Tuesday, 11/21/2023, was the official date for these signals.
If you want to follow our strategy, you should first decide how much you want to invest based on your risk tolerance (percentage of allocation). Then, you should check my Thursday StatSheet and Saturday’s “ETFs on the Cutline” report for suitable ETFs to buy.
3. Trend Tracking Indexes (TTIs)
The Senate’s approval of a temporary funding bill boosted the confidence of traders, who had been worried about a possible government shutdown. As a result, the main stock market indicators bounced back from their recent losses and ended the day with gains.
Our TTIs also recovered from the slump and moved further away from their critical levels.
This is how we closed 1/18/2024:
Domestic TTI: +5.85% above its M/A (prior close +5.30%)—Buy signal effective 11/21/2023.
International TTI: +5.11% above its M/A (prior close +4.58%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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