- Moving the market
Despite Nvidia exceeding earnings expectations and raising its outlook, the stock pulled back in after-hours trading yesterday and is down nearly 5% this morning.
This decline might have dragged the markets lower, but it didn’t, thanks to falling jobless claims and an unexpected upward revision of the second quarter GDP growth from 2.8% to 3%.
This pleasant “coincidence” fueled optimism among traders, suggesting that the risk of an imminent recession is low and that the bull market has more room to run. However, this bullish sentiment was short-lived, and only the Dow managed to close with a slight gain.
In contrast, Dollar General’s stock price plummeted by 26%, marking its steepest intraday decline ever. Additionally, Pending Home Sales hit record lows, dropping by 5.5% month-over-month in July. These headlines are part of a broader trend indicating that economic conditions may not be as favorable as they seem.
Bitcoin gave up some early gains but still closed in the green, while the Nasdaq dipped into the red, with both appearing to move in sync today.
Crude oil rebounded and continues its see-saw pattern, while bond yields rose, with the 10-year breaking out of its August triangle pattern. Gold reached another all-time high, diverging from the 10-year bond yield.
Does this divergence suggest that much lower interest rates are on the horizon?
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)
Nvidia’s stock price suffered a downturn following the latest earnings announcement. However, the market received a temporary boost from an upward revision of the GDP, which initially lifted investor sentiment.
Despite this positive momentum, bearish forces soon regained control, erasing the early gains.
Nevertheless, both of our TTIs managed to advance slightly amidst the market fluctuations.
This is how we closed 08/29/2024:
Domestic TTI: +7.68% above its M/A (prior close +7.27%)—Buy signal effective 11/21/2023.
International TTI: +7.57% above its M/A (prior close +7.48%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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