- Moving the market
The major indexes retreated from their highs as traders digested the latest earnings reports and observed the 10-year bond yield slipping back towards 4% from yesterday’s surge to 4.10%. So far, 40 of the S&P 500 companies have reported their latest results, with 80% surpassing analysts’ expectations.
Despite some traders acknowledging that the S&P 500 might be slightly overvalued, positive news flow has provided support during this notoriously volatile period. Consequently, the major indexes remain higher for the month.
In other news, reports that Israel allegedly agreed not to target energy facilities caused crude oil prices to drop nearly 4%, though they managed to stay above $70. Semiconductor giant ASML reported dismal earnings and outlook, resulting in a 17% stock drop, erasing all its 2024 gains.
The MAG7 basket suffered collateral damage, giving back all of yesterday’s gains, which led the Nasdaq to close lower ahead of the Dow and S&P 500. Among the big banks, five out of six reported gains, with Citi Bank being the exception. Bond yields pulled back from their recent rise, with the 10-year yield trending back to 4%.
The dollar maintained its bullish momentum, achieving its highest close since early August, while gold continued to rise towards record highs, diverging from the currency. Bitcoin also continued its upward trend, breaking out of its descending trading channel.
As Zero Hedge pondered: Will Bitcoin maintain its tracking of global liquidity?
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)
Today’s market downturn was driven by a sharp decline in crude oil prices and a disappointing earnings report from the semiconductor sector. These factors collectively dragged the major indexes down, with the Nasdaq suffering the most significant drop.
Despite the broader market’s struggles, our TTI showed resilience, experiencing only a moderate pullback.
This is how we closed 10/15/2024:
Domestic TTI: +8.95% above its M/A (prior close +9.40%)—Buy signal effective 11/21/2023.
International TTI: +7.05% above its M/A (prior close +7.64%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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