- Moving the market
Coming off a winning week, the major indexes initially slipped but managed to regain their footing, closing in the green once again.
The markets went through a significant downturn in early August due to the Japanese yen debacle and disappointing jobs data, which heightened traders’ concerns that the Federal Reserve was lagging in easing its interest rate policy.
However, recent headline news, including CPI, PPI, and retail sales, has temporarily alleviated those fears, despite underlying economic weaknesses persisting. As a result, conflicting data points will continue to fuel recessionary discussions.
There is hope that the Federal Reserve will provide insights into a potential rate cut during this week’s Jackson Hole symposium.
Before that, traders will closely analyze the minutes from the Fed’s latest meeting, set to be released this Wednesday. Despite the US Leading Indicators being down for the 29th consecutive month, as ZH pointed out, reaching levels worse than the trough of the Covid lockdowns, bullish sentiment remains strong.
Concerns were quickly dispelled by another substantial short squeeze, which boosted Small Caps and the broader market, including the MAG 7 basket, although they encountered overhead resistance.
The dollar’s continued decline benefited gold, keeping the precious metal above the $2,500 level. Bond yields remained unchanged, with the 2-year yield staying above 4%.
Bitcoin experienced a drop overnight but surged to $59k during the regular session, while crude oil was not as fortunate and fell below the $75 price point.
Traders are focused on the Fed’s Jackson Hole symposium, which has not been favorable to the markets in the past three years.
Will this time be different?
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 major indexes maintained their upward momentum from the previous week, driven by traders’ optimism regarding the anticipated outcomes of the Federal Reserve’s Jackson Hole symposium.
This positive sentiment was mirrored in our TTIs, which aligned with the market trends and showed improvement.
This is how we closed 08/19/2024:
Domestic TTI: +6.66% above its M/A (prior close +5.86%)—Buy signal effective 11/21/2023.
International TTI: +6.73% below its M/A (prior close +5.77%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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