- Moving the market
The major indexes began the session fluctuating around their respective unchanged lines with a slightly positive bias. Tech giant Nvidia managed to temporarily recover some of yesterday’s sharp losses, which marked the worst performance for equities since August 5th.
However, early bullish enthusiasm faded, leading the markets to another red close. Dropping bond yields failed to provide support, and a sustainable recovery was further hindered by job openings plunging to their lowest level since early 2021. Additionally, the Fed’s latest Beige Book report indicated only flat or declining economic activity.
September is historically a volatile month, often bringing surprises, mainly to the downside. While some traders see this as a dip-buying opportunity, the weakening economy and the Fed’s intention to lower rates add uncertainty to the potential resumption of the bull market.
Historically, changes in Fed policy have more often led to bear markets. I will share that chart again once the Fed cuts interest rates on September 18th.
Bond yields slid, with the 10-year dropping to 3.75%, its lowest level this year. Crude oil tumbled, losing its $70 support, while gold inched up slightly along with Bitcoin.
If economic indicators continue to worsen, will equities be able to maintain current levels, let alone reach new highs?
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)
After undergoing a significant plunge yesterday, the market showed signs of an encouraging rebound. However, this optimism was short-lived as the major indexes soon dipped back below their respective unchanged lines.
The Dow managed to stand out by eking out a tiny gain, while our TTIs were not immune to the overall trend and slipped slightly.
This is how we closed 09/04/2024:
Domestic TTI: +6.51% above its M/A (prior close +6.66%)—Buy signal effective 11/21/2023.
International TTI: +6.00% above its M/A (prior close +6.43%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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