- Moving the market
Concerns about a slowing economy pulled the markets down from their lofty levels right after the opening bell. The tech sector led the decline, with Nvidia’s 10% drop providing no reason for traders to be bullish. Unsurprisingly, other semiconductor stocks followed suit and declined as well.
The S&P 500’s 2.1% plunge marked its worst performance since the August 5th meltdown and its worst start to a month since May 2024, as noted by ZH. Small Caps mirrored this trend, plunging 3%.
This early downturn was driven by the latest manufacturing production readings, which confirmed fears of an imploding manufacturing sector and an overall economic slowdown—a scenario I have repeatedly commented on. The much-discussed “S” word, stagflation, seems to be the eventual outcome.
Currently, bad news is indeed bad news, as markets have become data-dependent and are anxiously awaiting the latest jobs report on Friday. This report, the last one before the next Fed meeting, may influence their policy, but only in terms of the rate cut’s magnitude, not its likelihood.
Commodities also took a hit, with crude oil tumbling over 4%, finding support at the $70 level. Even gold wasn’t immune from the sell-off, though its drop was modest as the precious metal successfully defended its $2,500 level.
Bond yields slid, but this offered no assistance to equities, as everything that wasn’t nailed down got hammered.
This makes me wonder: will dip buyers have the courage to step in tomorrow and reestablish bullish sentiment?
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 markets began the day on a downward trajectory, influenced by a dismal manufacturing report that empowered bearish sentiment.
This negative momentum affected all sectors, with no exceptions, as our TTIs also declined in tandem with the broader market.
This is how we closed 09/03/2024:
Domestic TTI: +6.66% above its M/A (prior close +8.05%)—Buy signal effective 11/21/2023.
International TTI: +6.43% above its M/A (prior close +7.66%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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