- Moving the markets
The major indexes edged higher Monday, boosted by gains in the tech sector, as the Dow attempted to build on its rally above the key 40,000 level. That effort failed at midday, and the index closed below that milestone.
Traders are eagerly awaiting Nvidia’s quarterly results due out Wednesday to better evaluate not only the strength of the AI powered rally but also whether these sky-high prices are justified.
Of course, relentless optimism prevails with some Wall Street firms suggesting that the tech darling could gain as much as 30% from current levels. Nvidia currently has the third largest market cap in the S&P 500.
Currently, traders are still clinging to hopes for a series of interest rate cuts in 2024, a trend that has been in place for over a year. I think this view will lead to disappointment, as inflationary forces are continuing to accelerate in part due to ongoing debt and deficits, which are a result of unrestrained government spending. After all, currently our government needs to borrow $1 trillion every 100 days to pay its bills. Ouch!
When all was said and done, the markets were mixed, as the Nasdaq outperformed, the Dow closed in the red, and the S&P 500 only eked out a tiny gain. The MAG7 stocks rallied sharply but faded late in the session.
Gold and silver rocketed higher, the dollar closed modestly in the green, but Bitcoin exploded but stopped just short of the $70k marker. Bond yields climbed moderately, as rate cut expectations drifted lower.
With Nvidia’s earnings on deck, the comparison to Cisco Systems comes into play again begging the question: Will history repeat itself?
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)
A positive start ran into major resistance, as the Dow plunged into the red thereby surrendering its 40k level. The Nasdaq managed to score a solid return joined by precious metals and Bitcoin.
Our TTIs roamed aimlessly and closed just about unchanged.
This is how we closed 5/20/2024:
Domestic TTI: +9.39% above its M/A (prior close +9.48%)—Buy signal effective 11/21/2023.
International TTI: +10.41% above its M/A (prior close +10.38%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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