- Moving the market
The markets opened sharply lower today, with bullish sentiment notably absent as the major indexes fell more than 1.5%.
However, they managed to bounce back from their worst levels of the day. Despite the light trading volume typical of a holiday-shortened week, traders found no clear catalyst for the market’s movements. Even lower bond yields couldn’t prevent the bears from dominating.
Although the major indexes are still below their record highs, they have posted some of the best year-to-date gains since 2021. The S&P 500 and Dow are up over 25% and 14%, respectively, while the Nasdaq leads with a gain of over 31%.
Nevertheless, concerns are growing that year-end profit-taking has sapped upward momentum after recent losses, suggesting a possible pause following the significant upswing.
Surging bond yields, despite the Federal Reserve’s efforts to lower them, have contributed to recent market weakness. It remains to be seen if this trend will continue to negatively impact markets as we enter 2025.
Soft survey data continued its post-election decline, while Pending Home Sales exceeded expectations but diverged from rising interest rates.
Mega-cap tech stocks took an early dive but rebounded thanks to dip buyers, nearly breaking even. Bitcoin followed a similar path, dropping early but staging a strong recovery to close in the green.
Bond yields finally fell, with the 10-year yield sliding to 4.54%, a small but encouraging improvement. The dollar also recovered from a significant drop, which ultimately cost gold a positive close.
As we approach the last trading day of the year, will the bulls find something to cheer about despite a lackluster December?
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 major indexes suffered a sharp sell-off early in the session. Despite a determined effort to recover, they ultimately lost momentum. However, they did manage to rebound from the session’s lowest points.
Similarly, our TTIs mirrored this trajectory, ending the day in negative territory.
This is how we closed 12/30/2024:
Domestic TTI: +2.26% above its M/A (prior close +3.30%)—Buy signal effective 11/21/2023.
International TTI: +1.05% above its M/A (prior close +1.76%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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