Investors On Edge As Inflation Report Looms; Bitcoin Steals The Show

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[Chart courtesy of]

  1. Moving the markets

Investors were cautious today as they awaited a crucial inflation report coming out later this week. The report, based on the PCE index for January, is the Fed’s favorite way to measure inflation. Until then, the market is in limbo, waiting for a signal.

The market is also trying to extend its recent gains that pushed the Dow and the S&P 500 to record highs. But this week, the market has stumbled, falling slightly. The major indexes are heading for their second losing week in three.

The downturn, especially for the tech sector, has made me wonder if the rally driven by AI enthusiasm can last. I doubt it, because most of the stock gains from AI are based on hype and marketing. Only a few companies have actually seen a real boost in revenue from AI.

The real action today was in crypto space, where I have been an investor since 2017. Now that Bitcoin ETFs are available, I am also using this unique asset class in my advisory practice.

Bitcoin soared a whopping 13% to almost $64,000 before a wave of selling pressure (likely from futures) caused Coinbase mayhem, erasing $5,000 of the gains before bouncing back up again. By the end of the US equity trading session, bitcoin was at $60,000, still up 6% and close to breaking its all-time high.

Today, apart from crypto, stocks were lower led by Small Caps and Nasdaq. Most of the selling pressure came at the European open (and we recovered into the European close), but those recovery gains didn’t last. The Dow ended the day as the bestof the worst.

Bond yields fell across the board, the dollar rebounded from its recent slide, gold dropped and rose to close in the green, and oil prices gave up yesterday’s gains.

Economically, as ZeroHedge noted, the consumer is still struggling, as the Credit Manager’s survey shows that the rate of “rejections” for credit applications and the number of accounts moved to “collections”, is spiking to 2008 levels.


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 market was flat and volatile today, as the major indexes moved back and forth around their opening levels. There was no clear trend or momentum in either direction.

Our Trend Tracking Indexes also stayed close to their previous values, showing no significant change.

This is how we closed 2/28/2024:

Domestic TTI: +8.97% above its M/A (prior close +8.93%)—Buy signal effective 11/21/2023.

International TTI: +8.53% above its M/A (prior close +8.84%)—Buy signal effective 11/21/2023.

All linked charts above are courtesy of Bloomberg via ZeroHedge.



Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly to get more details.


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