- Moving the market
The markets continued to face challenges following significant declines in big tech stocks during the previous session. Traders are primarily concerned about the trajectory of interest rate cuts, which are crucial for maintaining the bullish cycle.
Adding to the negative sentiment were reports indicating that private sector job creation in December fell more than expected, while wages grew at the slowest pace since July 2021. To me, these data points suggest a struggling consumer, especially when considering the record levels of credit card debt.
This morning, rising bond yields, driven by concerns that inflation is not under control, were also a worry. However, an early spike in the 10-year yield to 4.73% quickly reversed.
Ultimately, dip buyers stepped in, lifting the Dow and S&P 500 out of the red and into a moderately positive close. The Nasdaq nearly broke even, while Small Caps lagged.
Crude oil suffered its largest drop in a month after rising in six of the last seven days. The dollar ended the session higher, but this did not negatively impact gold, which gained 0.54%.
Bitcoin continued its downward trend following yesterday’s stumble but found support at the $93,000 level.
With the markets closed tomorrow, I will return on Friday with the week-ending commentary.
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)
Following another sharp decline triggered by rising bond yields, the markets managed to stabilize, with both the Dow and S&P 500 closing the volatile session in positive territory.
This recovery was largely supported by the 10-year yield, which retreated to its previous level.
Meanwhile, our TTI experienced significant fluctuations throughout the day, ultimately ending mixed, with only the domestic TTI showing a slight increase.
This is how we closed 01/08/2025:
Domestic TTI: +2.61% above its M/A (prior close +2.49%)—Buy signal effective 11/21/2023.
International TTI: +1.05% above its M/A (prior close +1.17%)—Buy signal effective 11/21/2023.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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