[Chart courtesy of MarketWatch.com]

1. Moving the markets

Today, the stock market saw a significant uptrend, with technology shares outshining the rest. This surge builds upon the previous session’s momentum that set new records on Wall Street. Leading the charge, mega-cap technology companies like Meta Platforms, Microsoft, and Amazon each saw gains of at least 1%. In contrast, Apple experienced a 3% decline amid an antitrust lawsuit filed by the Justice Department.

The market’s upward trajectory continued from Thursday, propelling the three major indexes to unprecedented closing highs. Notably, the S&P 500 surpassed the 5,200 level for the first time. These gains align with the Federal Reserve’s recent announcement, which signals three potential interest rate cuts this year while maintaining current borrowing costs.

Federal Reserve Chairman Jerome Powell, in today’s press conference, hinted at possible rate reductions if the downward trend in inflation persists. However, the specifics of these cuts remain undisclosed.

A slew of positive economic indicators—including the Philly Fed, jobless claims, PMIs, Leading Indicators, and existing home sales—contributed to a rise in the Citi Economic Surprise Index. Yet, this wave of optimism has paradoxically dampened the anticipation for rate cuts in 2024.

As bond yields showed mixed signals, the dollar made a strong comeback, nearly erasing the losses from the previous day. Meanwhile, Bitcoin edged closer to the $65k mark, and gold prices shifted, contradicting the previous day’s trend. It’s important to note a discrepancy in the MarketWatch chart numbers above.

Additionally, a notable divergence between the Nasdaq and the 10-year yield has emerged this year, leading to the question:

Which will yield first, the Nasdaq or the bond market?

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[Chart courtesy of MarketWatch.com]

1. Moving the markets

In today’s financial frolics, stocks took a joyride upwards after the Federal Reserve played it cool, keeping rates parked at a sky-high 23-year peak. Despite this, they’re eyeing a trio of rate cuts by the end of 2024’s calendar pages. The big three indexes didn’t just climb; they set new altitude records, while Small Caps had a blast, rocketing to stellar heights.

The Fed’s crystal ball still forecasts those three rate reductions, but they’re playing hard to get, wanting a peek at more signs that inflation’s taking a chill pill. Before the bigwigs met, the rumor mill churned out fears of inflation’s hot streak leading to fewer rate cuts, but the Fed’s dot plot kept the triple cut dream alive, giving traders and the market’s mood a nice boost. It seems the Fed’s not ready to sober up from the rate-cut party just yet, and for now, the market’s eating it up with a rally spoon.

Powell, the financial oracle, dropped some cryptic clues:

“We’re treading carefully; it’s a coin toss on risks.”

“No decisions today, folks. But we might ease off the money hose soon, as per the grand plan.”

Translation: It’s as clear as a foggy morning in San Francisco.

In a twist, rate-cut bets for 2024 actually went up, sending the dollar on a nosedive and giving gold a high-five with a new shiny record. Bitcoin got back in the game, bouncing over the $65k fence, and the MAG 7 strutted to a record beat, all thanks to bond yields taking a tumble. Crude oil played the rebel, dipping under $82.

Hats off to ZeroHedge for the CPI time-travel chart. So, fellow market watchers, are we strapping in for another inflation rollercoaster ride?

Continue reading…

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)

Before Federal Reserve Chairman Powell’s remarks on interest rates, the major stock indexes showed no significant movement. However, after his comments, which leaned more towards a stricter (hawkish) rather than lenient (dovish) stance on interest rates, the markets interpreted this as favorable. Consequently, there was a notable rally, and the markets finished strong.

Similarly, our TTIs also experienced an upswing and ended the day on a higher note.

This is how we closed 3/20/2024:

Domestic TTI: +10.79% above its M/A (prior close +9.84%)—Buy signal effective 11/21/2023.

International TTI: +10.47% above its M/A (prior close +9.70%)—Buy signal effective 11/21/2023.

All linked charts above are courtesy of Bloomberg via ZeroHedge.

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Do you have the time to follow our investment plans yourself? If you are a busy professional who would like to have his portfolio managed using our methodology, please contact me directly to get more details.

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[Chart courtesy of MarketWatch.com]

1. Moving the markets

The S&P 500 ticked upwards today, catching a lift from Nvidia’s big reveal at their AI conference. Wall Street’s attention, however, was split as eyes turned to the Federal Reserve’s two-day policy pow-wow.

Nvidia, the tech world’s darling, nudged up 1% as investors chewed over the news from its GTC Conference. CEO Jensen Huang showcased the new AI chip, Blackwell, claiming it’s a powerhouse compared to its predecessors. With the stock’s year-to-date rally at a whopping 78%, some investors might be tempted to pocket their gains after the big announcement.

Super Micro Computer, the builder of Nvidia’s AI server dreams, saw its shares dip by 9% amid talk of a share offering. Yet, with a 250% surge this year and a recent S&P 500 induction, they’re not exactly down and out.

Inflation’s cautionary tales have traders on edge, pondering if the Fed will play it safe with interest rates. But fed funds futures are betting big (99% big) that rates will stay put this week.

As the Fed wraps up their March meeting, don’t hold your breath for any interest rate drama. The market’s not betting on it, not now, not even at the next meeting.

Oil, dubbed Black Gold, took the day’s top spot, with WTI prices hitting a high note at $84, a peak unseen since the yuletide season. Rate-cut hopes took a tumble, bond yields got cold feet, and bitcoin did a quick dip and recovery. The GBTC’s sudden drop? Just a hiccup.

With the Fed’s upcoming announcement and the market buzzing about no rate cuts in 2024, the question is: will the indexes ride the wave of relief or brace for a splash?

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[Chart courtesy of MarketWatch.com]

1. Moving the markets

On a manic Monday, the stock market got a jolt of energy, with Nvidia leading the charge like a caffeinated squirrel. As Wall Street’s eyes are glued to an upcoming AI extravaganza and the Fed’s crystal ball for future money moves, Nvidia’s shares did a little happy dance, jumping over 4% in anticipation of their GTC Conference. Here, they’re set to unveil their AI wizardry, and the crowd goes wild, with analysts throwing price targets around like confetti—one even sees a whopping 34% pot of gold at the end of the Nvidia rainbow.

Meanwhile, Alphabet’s shares boogied up 7%, their best performance in a year, on whispers of Apple cozying up to Google for some AI magic in iPhones. This tech tango comes after a fortnight of the S&P 500 and Nasdaq playing hard to get, while the Dow has been nursing a three-week hangover.

The Fed’s Open Market Committee is about to roll the dice in their March meeting. The two-day financial fiesta starts Tuesday, with the grand reveal on Wednesday. February’s hotter-than-a-jalapeño inflation numbers have left investors sweating, wondering if the Fed will play it cool or keep the interest rate heat on high.

As for the Fed funds futures, they’re betting a 99% chance that the interest rate party won’t stop this week. But the June rate cut rumors have cooled off to a lukewarm 55%.

In a plot twist, the most shorted stocks took a nosedive but then rocketed like they had FOMO, only to run out of steam by closing time. Treasury yields strutted higher, Bitcoin lost its groove below $68k, the dollar flexed its muscles, and gold just chilled.

Oil prices, on the other hand, turned up the heat on hopes of China’s growth spurt, Russia’s refinery drama, and Iraq’s pinky promise to stick to OPEC+’s production diet.

So, as traders don their fortune-teller hats for the Fed’s next move, one can’t help but wonder:

Will Powell cave to peer pressure and slash rates, or will he keep playing hardball?

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