- Moving the markets
The rally broadened today with the Dow reaching record territory, while the Nasdaq lagged. A rotation out of tech and into Small Cap stocks continued, at least for now. Nvidia slipped about 2%, while Tesla and Meta each dropped over 1%.
A massive short squeeze provided a significant boost, with the most shorted stocks rallying for 10 consecutive days, marking their biggest advance in about four years. Small Caps also set a record, achieving the largest five-day outperformance over the S&P 500 since late 1987.
Banks like Bank of America and Morgan Stanley advanced due to better-than-expected earnings, as the reporting season gains momentum. Traders are highly optimistic about this earnings season.
Retail sales were unchanged from June, surprising economists who had anticipated a 0.4% decline. Excluding autos, sales rose 0.4% compared to a 0.1% forecast. Traders concluded that consumers were not buckling under pressure as widely expected.
Bond yields fell despite stronger-than-expected retail sales numbers. The dollar remained stable, while oil prices dipped but managed to stay around the $80 level.
Bitcoin continued its rebound, surpassing the $65k mark. Gold not only hit a new all-time high but also competed closely with the Dow for the session’s top performer. The Dow edged out a win, gaining 1.85% compared to gold’s 1.83%.
However, the significant gap between gold and the 10-year yield suggests that gold might be anticipating some kind of crisis.
Continue reading…
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 rotation out of tech continued unabated and propelled the broad market higher with Small Caps taking top billing.
Our TTI’s joined the party with especially the domestic one scoring a solid gain.
This is how we closed 07/16/2024:
Domestic TTI: +9.01% above its M/A (prior close +7.17%)—Buy signal effective 11/21/2023.
International TTI: +8.78% above its M/A (prior close +8.20%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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