Market Resilience Tested As Retail Sales Loom, Yet Majors Rally On Economic Optimism

Ulli Market Commentary Contact

[Chart courtesy of]

  1. Moving the markets

The indexes were closely hugging their respective unchanged line at the start of the session, as we entered the Holiday shortened week. Some of this uncertainty was based on tomorrow’s release of the May retail sales numbers, which can represent the financial health of the consumer.

After the early dip, buyers stepped in and pulled the indexes out of their slump, and off to the races we went with all 3 majors advancing solidly, supported by traders’ beliefs that future economic data would come in stronger and with more consistency.  

Last week was a mixed bag for the major indexes with the Dow recording its third losing week in four, while the S&P 500 and Nasdaq scored their seventh up week out of the last eight.

Also on deck will be home sales and housing-starts later this week.

Bond yields rose across the spectrum, which pulled rate-cut expectation lower. However, traders did not seem to care and drove equities higher, which created this divergence between the 10-year and the S&P 500.

Not to be left out, the MAG 7 stocks soared, but breadth keeps on getting worse, as the S&P 500 goes its separate bullish way when compared to those of its members that are positioned above their 200-day M/A.

The dollar weakened despite higher yields, crude oil rebounded sharply and crossed it $80 level to the upside. Gold slipped, but Bitcoin rebounded and raced back toward its $67k level.

ZH pointed to another market oddity, namely that the MAG7 stocks have added $3.3 trillion in market cap in Q2 so far, while the 493 other stocks in the S&P 500 have lost $270 billion.

Hmm…does that look like a healthy, balanced, and sustainable market to you?

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)

After a slow start, the bulls came out of hibernation and drove the major indexes to a solid green close.

Our TTIs participated and recaptured Friday’s small setback.

This is how we closed 06/17/2024:

Domestic TTI: +6.09% above its M/A (prior close +5.33%)—Buy signal effective 11/21/2023.

International TTI: +6.36% above its M/A (prior close +6.03%)—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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