Dow And S&P 500 Hit Record Highs On Treasury Secretary Nomination

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

This morning, the Dow and S&P 500 surged into record territory following President Trump’s announcement of his Treasury secretary nominee, Scott Bessent.

Traders reacted positively to the news, cheering the nomination of the hedge fund manager, who recently suggested that any tariffs proposed by Trump should be implemented gradually.

Despite the potential peace deal between Israel and Lebanon, the markets experienced significant volatility.

Crude oil, Bitcoin, and gold all declined, while stocks rallied, led by Small Caps, which benefited from a continued short squeeze. However, the Mega Cap basket slipped again, with one trader humorously describing it as a “source of funds for buying other stuff.”

Lower bond yields provided support for the major indexes, with the 2-year yield plunging significantly. The dollar followed gold lower after its recent relentless rise.

The options market indicated a strong bullish sentiment, with 65% of all options traded being calls, reaching a level of optimism not seen since December 2021.

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ETFs On The Cutline – Updated Through 11/22/2024

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (196 vs. 211 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For November 22, 2024

Ulli Market Commentary Contact

ETF Tracker StatSheet          

You can view the latest version here.

MAJOR INDEXES RECOVER AS BITCOIN NEARS $100K MILESTONE

[Chart courtesy of MarketWatch.com]

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The major indexes continued their upward momentum, closing the week with gains and recovering from the previous week’s losses, which had seen the post-election rally lose steam. The markets appear to be stabilizing after absorbing the election aftermath and the much-anticipated Nvidia results, which met but did not exceed expectations.

Earnings reports were mixed: The Gap saw a 7% rise, while Intuit fell by 4%, though neither had a significant impact on the market. Traders are closely watching Bitcoin’s surge as it nears the $100,000 mark, alongside Small Caps, which ended the week with a 3% gain.

According to the latest UMich Sentiment survey, long-term inflation has jumped to its highest level since June 2008, while short-term inflation has dropped to four-year lows. It seems clear to me that inflation will be a persistent issue for the foreseeable future.

The dollar surged to its highest level since September 2022, with Small Caps leading this week’s recovery, supported by a squeeze on the most shorted stocks. The rotation out of tech continued, with Nvidia slipping and the Mega Tech basket erasing most of its post-election gains.

Gold recovered from its recent plunge, posting gains every day this week.

However, the standout performer was Bitcoin, which continued its charge towards $100,000, having gained approximately 45% since just before the election results.

As noted by ZH, if current global liquidity trends continue, Bitcoin could reach $135,000 before encountering significant selling pressure.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 11/21/2024

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, November 21, 2024

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— since 11/21/2023

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +9.09% and is in “Buy” mode as posted.

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Market Sentiment Stays Positive As Bitcoin Soars And Nvidia Recovers

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Markets often demand perfection, and this was evident in Nvidia’s performance. Despite posting better-than-expected third-quarter results and issuing strong guidance, Nvidia’s stock initially dipped moderately before surging higher.

Some analysts expressed concerns over slowing revenue growth, suggesting that the most optimistic estimates in Nvidia’s forecast were not exceeded, leading to the initial pullback. It remains to be seen whether bargain hunters will step in or if growth and momentum investors will exit the stock.

Overall, market sentiment remains positive, bolstered by Bitcoin crossing the $98,000-mark last night and briefly touching $99,000 today. Traders are hopeful that the new administration will introduce more supportive regulations for the crypto industry.

Economic data presented a mixed but generally negative picture. Initial jobless claims fell to 213,000 from last week’s 219,000, but continuing claims rose to 1.908 million from 1.872 million. The manufacturing index also slowed significantly, dropping to -5.5 in November from October’s +10.3, indicating growing economic weakness.

The Dow and S&P 500 achieved solid gains, driven by a significant short squeeze, while the Nasdaq lagged and barely stayed in positive territory as major tech stocks, including Google, took a hit.

Bond yields edged higher, yet utilities surged, with XLU adding 1.75%. Crude oil recovered its $70 level, and the dollar rallied to near recent highs.

Gold had a strong day, crossing its 50-day moving average and marking its fourth consecutive day of gains after six straight days of losses.

Bitcoin’s momentum accelerated sharply following the announcement of Gensler’s retirement, briefly touching $99,000 before pulling back.

Will we see Bitcoin reach the magical $100,000 mark by this weekend?

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Bitcoin Hits Record, Retail Stocks Plunge: Nvidia Earnings Anticipated

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The markets opened in negative territory, with Nvidia’s stock slipping ahead of its highly anticipated earnings report. By the end of the session, the major indexes had recovered, closing near their starting points.

Traders view Nvidia’s upcoming report as a potential catalyst to invigorate the market for the rest of the year, especially after the recent pullback from the post-election rally that had propelled the indexes to new highs.

However, last week, Federal Reserve Chair Jerome Powell signaled that he is in no hurry to cut interest rates, which dampened bullish sentiment.

Retail stocks suffered significantly, with Target’s shares plummeting 20% following its largest earnings miss in two years and a reduction in its full-year guidance due to cost pressures and weakening discretionary demand.

This decline dragged down the major indexes, along with the retail ETF and other retail giants like Costco, Walmart, Dollar Tree, and Home Depot.

This situation reflects the challenges consumers face in an inflation-plagued environment. Given that consumer spending accounts for 67% of GDP, the markets may soon recognize that the economic data might be more hype than reality.

The Mega-Cap tech sector experienced a sharp decline but managed to rebound, mitigating early losses. Bond yields ended the day slightly higher but showed significant intra-day volatility.

Gold prices rose for the third consecutive day, while Bitcoin hit another record high close to $95,000 before pulling back slightly at the end of trading. The dollar rebounded from Monday’s losses, and crude oil prices slipped in afternoon trading.

All eyes are now on Nvidia’s earnings report, due out this afternoon, which many traders consider the most crucial announcement for the remainder of the year.

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