- Moving the market
Equities were mixed in early trading but gained some ground as bullish sentiment persisted.
The tech sector continued to lead, with Nvidia rising over 2% following news that Saudi Arabia purchased 18,000 of its highly rated AI chips. Fellow chipmaker AMD surged more than 7% due to a $6 billion buyback.
The S&P 500 finally reached positive territory for the year, despite previously being more than 20% below its record high set in February. With the easing of tariff wars and the reduction of levies, particularly between the U.S. and China, traders have shifted from bonds to equities, driving the S&P 500 above its widely followed 200-day moving average.
Whether this rebound has the momentum to push the indexes higher remains uncertain. Has this epic surge come too far too fast?
Despite positive headlines from the Middle East, attributed to Trump’s deal-making skills, market follow-through was weak, with only the Nasdaq closing solidly in the green.
Uncertainty persisted as bond yields continued their upward trend, with the 10-year yield topping 4.5% and the 30-year yield approaching 5%, as rate-cut expectations diminished.
Gold dropped again, losing its $3,200 level, and settling at one-month lows, while the dollar fluctuated to close unchanged. Crude oil drifted lower, as did Bitcoin, though the cryptocurrency found support at the $103k level.
More potentially market-moving data is due out tomorrow, including Retail Sales and the Producer Price Index (PPI).
2. Current domestic “Sell” Cycle (effective 4/4/25); International “Buy” Cycle (effective 5/8/25)
Our domestic Buy cycle, which started on November 21, 2023, concluded on April 3, 2025. The market responded negatively to Trump’s tariff policy, leading to a sharp decline in major indexes and the broader market.
On April 4, 2025, our International Trend Tracking Indicator (TTI) also dropped significantly, triggering a “Sell” signal. However, it has since rebounded to a level that has generated a new “Buy” signal, effective May 8, 2025.
3. Trend Tracking Indexes (TTIs)
The major indexes, except for the Nasdaq, remained largely unchanged and closed near their starting points, resulting in minimal gains or losses. Bullish sentiment was weak, with the broader market showing little participation.
Consequently, our TTIs pulled back, with the domestic TTI barely staying in bullish territory. The possibility of a market reversal remains in play.
This is how we closed 05/14/2025:
Domestic TTI: +0.76% above its M/A (prior close +1.37%)—Sell signal effective 4/4/25.
International TTI: +5.21% above its M/A (prior close +5.28%)—Buy signal effective 5/8/25.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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