- Moving the market
Escalating tensions in the Middle East have significantly dampened upward momentum, pulling the indexes down from their lofty levels.
Wall Street’s “fear gauge,” the volatility index (VIX), spiked sharply, reflecting traders’ concerns. Historically, fears of contagion have a destabilizing effect on the markets. Early in the day, bond yields plummeted, benefiting gold and utilities. As expected, crude oil prices surged, gaining over 3%.
The tech sector led the decline, with major players like Apple, Tesla, and Nvidia experiencing drops. However, Meta defied the trend, moving closer to its all-time high.
Despite Federal Reserve Chair Powell’s encouraging remarks yesterday about the possibility of two more rate cuts this year, if the economy performs as anticipated, the reality of escalating conflict and the East Coast port strike weighed heavily on the markets, potentially derailing economic conditions.
Bond yields initially fell but managed to recover from their lowest levels, with the 10-year yield dipping below 3.7% at one point. Gold emerged as a “safe haven,” recovering its losses from the previous day.
Despite the drop in yields, the dollar showed significant strength amid global turmoil. Bitcoin, which is often seen as an anti-geopolitical risk asset, failed to hold its ground, and declined, mirroring the downward trend of the MAG7 basket of tech stocks.
Will increased liquidity still be the key factor to push Bitcoin to new all-time 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)
The port strike, coupled with escalating tensions in the Middle East, created a challenging environment for the stock market.
These factors were sufficient to dampen the optimism of bullish investors, allowing bearish sentiment to dominate. As a result, the major indexes closed in the red.
Despite this overall market downturn, our TTIs experienced a more modest decline compared to the broader market.
This is how we closed 10/01/2024:
Domestic TTI: +8.43% above its M/A (prior close +9.00%)—Buy signal effective 11/21/2023.
International TTI: +7.86% above its M/A (prior close +8.21%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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