
- Moving the market
Equities saw a bounce but ultimately pulled back during the session following yesterday’s strong advances, as traders analyzed the latest earnings reports.
Banks such as Bank of America and Morgan Stanley saw gains after surpassing expectations, like their peers JP Morgan and Goldman Sachs from the previous day. This earnings season is off to a promising start, with 77% of reporting companies exceeding their outlooks.
Traders are still energized from yesterday’s strongest session since November, where all major indexes posted solid gains, driven by a moderate improvement in core inflation. Let’s hope these figures are accurate and not subject to revision.
Federal Reserve Governor Waller provided some reassurance, suggesting that if incoming inflation data continues this path or improves, rate cuts could happen sooner than the market anticipates.
On the economic front, retail sales disappointed, jobless claims soared to three-year highs, but the Philly Fed Manufacturing Index surged in January, marking the biggest month-over-month jump since COVID-19 and the second-highest level in 40 years, according to ZH.
Bond yields slipped again, but the dovish sentiment in rates wasn’t enough to push the major indexes into the green, despite another short squeeze lifting Small Caps.
The dollar traded sideways, while gold surged higher, closing above $2,700—its highest level since the election. Bitcoin, after dropping below $90 a few days ago, reversed course and surged back above $101,000 today.
After this recent rollercoaster ride, is Bitcoin now on its way to a new all-time high?
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)
Despite several efforts to sustain the bullish momentum from the previous day, the three major indexes ultimately surrendered some of their gains.
In contrast, our TTIs defied this trend, closing higher and reinforcing our current positive outlook.
This is how we closed 01/16/2025:
Domestic TTI: +4.36% above its M/A (prior close +3.55%)—Buy signal effective 11/21/2023.
International TTI: +2.03% above its M/A (prior close +1.57%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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