- Moving the markets
Today was a bad day for the US stock market, especially for the smaller companies. Nvidia dragged down the tech sector as investors worried about its high price before its earnings report tomorrow.
Even the big names like Amazon, Microsoft, and Meta couldn’t escape the sell-off and lost more than 1% each.
The financial sector had some excitement with the news that Capital One Financial will buy Discover Financial Services for $35.3 billion in stock. The deal is expected to close sometime between late 2024 and early 2025, so don’t hold your breath.
This comes after a week of losses on Wall Street, as economic data showed that the Fed may not lower interest rates as much or as soon as the market hoped this year. Some indicators were disappointing and pushed up the expectations for a rate cut in 2024.
The MAG7 stocks (Microsoft, Amazon, Google, and Meta) suffered a breakdown from their previous uptrend, while the most hated stocks also fell.
The bond market was mixed, with the 10-year yield dropping slightly, which made the dollar weaker and gold stronger, but oil prices slid below $78 a barrel.
And as we wait for NVDA’s earnings report, this chart that compares the AI Boom with the Covid bust may come back to haunt us.
Or will NVDA surprise us all and break the pattern?
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 stock market had a weak performance today. The S&P 500 and Nasdaq stayed in the red for the whole session, while the Dow briefly rose above its opening level but ended up lower as well.
Our TTIs showed different results: the one for the U.S. market declined, while the one for the global market improved. However, for the time being, I remain optimistic about the long-term prospects of both markets.
This is how we closed 2/20/2024:
Domestic TTI: +7.74% above its M/A (prior close +7.99%)—Buy signal effective 11/21/2023.
International TTI: +7.60% above its M/A (prior close +7.45%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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