- Moving the market
This morning, crude oil prices plummeted by over 5% following an Israeli airstrike on Iran that notably avoided sensitive oil and nuclear facilities.
This unexpected development contributed to a jump in the major indexes, buoyed by the easing geopolitical tensions and the anticipation of upcoming mega-cap technology earnings. These earnings, coupled with the steadily improving Citi Economic Surprise Index, are expected to sustain the market’s upward momentum.
Traders are gearing up for the busiest week of the third-quarter earnings season, which coincides with the Presidential election on November 5. Five of the MAG7 companies—Alphabet, Microsoft, Meta, Apple, and Amazon—are set to release their earnings reports. Given their high valuations, these companies must meet expectations to prevent a potential sell-off.
On the economic front, this week is packed with significant events, including the PCE index release on Thursday, a preliminary reading of the third-quarter GDP, and the potentially market-moving jobs report on Friday.
Last week’s short squeeze continued to drive Small Caps higher, although the MAG7 basket saw minimal gains. Bond yields experienced volatility, with the 10-year yield surpassing the 4.27% mark.
Meanwhile, the dollar and gold ended the session unchanged, but Bitcoin found support and raced towards the $70,000 mark.
Despite the prevailing uncertainty surrounding the election, bond yields appear to have settled on an outcome, as indicated by the latest charts.
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)
At the start of the trading session, the markets surged but maintained their upward momentum throughout the day.
By the close, the major indexes had secured moderate gains, reflecting a positive market sentiment. Interestingly, the rise in the 10-year yield did not deter the bullish traders.
Additionally, our TTIs remained stable and showed progress, reflecting the optimistic market mood.
This is how we closed 10/28/2024:
Domestic TTI: +7.30% above its M/A (prior close +6.69%)—Buy signal effective 11/21/2023.
International TTI: +5.38% above its M/A (prior close +4.74%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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