- Moving the market
Equities scored moderate gains, led by the Dow, as the much-anticipated Consumer Price Index (CPI) fell below the 3% mark, coming in at 2.9%, its lowest reading since 2021. Month-over-month prices increased by 0.2%, aligning with expectations, as did core inflation, which excludes food and energy.
This follows a better-than-expected Producer Price Index (PPI) report, which boosted stocks during yesterday’s market surge. Traders believe these figures have increased the likelihood of the Federal Reserve cutting rates at their next meeting in September.
Speculation is now rife about whether the Fed will cut rates by 25 or 50 basis points. Future economic data will be crucial, as weaker data could support a change in Fed policy.
The session was somewhat perplexing: Small Caps declined, the Dow rose, the Nasdaq remained unchanged, bond yields were mixed, and the dollar initially slid before staging a comeback. The Mag7 basket rallied, but commodities dropped.
Gold and Bitcoin both declined, with Bitcoin affected by news that the U.S. government may be selling some of its holdings. Crude oil also followed a downward trend but found support at the $77 level.
Traders are now focusing on tomorrow’s major event—the release of retail sales data, which has the potential to move markets in either direction.
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)
Despite a sluggish beginning, the major indexes eventually gained upward momentum, resulting in moderate gains. However, the Nasdaq barely managed to break even.
Meanwhile, our TTIs also experienced a slight increase, leading to another positive close.
This is how we closed 08/14/2024:
Domestic TTI: +4.64% above its M/A (prior close +4.42%)—Buy signal effective 11/21/2023.
International TTI: +4.08% below its M/A (prior close +3.53%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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