Dow And S&P 500 Rally As Bitcoin Soars Past $87k

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The Dow continued its rally from last week, surpassing the 44,000 mark, while the S&P 500 also made significant strides by crossing the 6,000 level. However, the Nasdaq lagged. With the bond markets closed, trading activity was somewhat limited.

Several major banks saw their stock prices rise significantly, contributing to the Dow’s impressive gain of over 300 points. Traders are hopeful that Trump’s election victory might lead to more lenient regulations for the banking sector.

Bitcoin underwent a massive surge over the weekend, effortlessly breaking through the $80,000 barrier and ending the day around $87,000. This rise was fueled by hopes of deregulation and the historical trend that Bitcoin’s best performances occur approximately six months after each four-year halving cycle.

In contrast, gold prices have been declining since the election. However, when adjusted for inflation, the precious metal has not seen a significant pullback from its all-time high.

Small Caps emerged as the big winners, while the Nasdaq, despite closing slightly in the green, was the biggest loser. This was partly due to the most shorted stocks recording their fifth consecutive day of gains.

The dollar rallied back to recent highs, while crude oil prices fell to two-week lows, dropping below the $70,000 level.

The futures markets are indicating a potential increase in 10-year bond yields, which could put some pressure on the bullish sentiment when the markets open tomorrow.

Read More

ETFs On The Cutline – Updated Through 11/08/2024

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 (210 vs. 245 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 8, 2024

Ulli ETF Tracker Contact

ETF Tracker StatSheet          

You can view the latest version here.

MAJOR AVERAGES POST BEST WEEK SINCE 2023 FOLLOWING ELECTION

[Chart courtesy of MarketWatch.com]

  1. Moving the market

This morning, the Dow and the S&P 500 moved higher, while the Nasdaq lagged, as traders considered the implications of the post-election rally and the Federal Reserve’s latest interest rate cut.

By the end of the week, all three major averages had posted strong gains, largely driven by a massive rally on Wednesday following Trump’s election victory. This marked their best week since November 2023.

Small-cap stocks led the charge, surging over 7% during the five-day period, fueled by a significant short squeeze.

Despite these impressive gains, traders are cautious, viewing the market as technically overbought and questioning the sustainability of these moves. However, the journey to close above the S&P 500’s $6,000 level continues, supported by favorable seasonal trends.

Wall Street generally perceives a Republican-controlled government as beneficial, anticipating deregulation, increased mergers and acquisitions, and proposed tax cuts. However, concerns about rising debt and deficits and their potential impact on inflation persist.

Bond yields experienced significant volatility, initially spiking the day after the election before tapering off towards the week’s end.

The dollar strengthened for the sixth consecutive week, leading to a decline in gold prices. Meanwhile, Bitcoin had its second-best week of the year, setting several record highs, bolstered by substantial inflows into Bitcoin ETFs.

The cryptocurrency appears to be on a path towards $80,000, though the timing remains uncertain.

Read More

Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 11/07/2024

Ulli ETF StatSheet Contact

ETF Data updated through Thursday, November 7, 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 +9.33% and is in “Buy” mode as posted.

Read More

Bitcoin Hits New High As Gold Rebounds And Dollar Slips

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes began the session on a positive note, buoyed by anticipation of the Federal Reserve’s meeting on interest rates.

Despite the incomplete election results, traders seemed relieved, dispelling earlier concerns about a prolonged election process. However, any geopolitical news could still trigger significant and sudden swings in asset prices.

The much-anticipated Fed meeting concluded with Chair Powell announcing the expected 0.25% rate cut. Powell expressed confidence in the economy’s health, suggesting that the Central Bank would likely continue with small, incremental adjustments moving forward.

Wall Street views the second Trump administration as favorable for risk assets like stocks. However, it’s important to remember that persistent large deficits and higher tariffs could signal higher inflation ahead.

I think Powell’s decision to cut rates is questionable, especially since the Citi Economic Surprise Index has surged following the Fed’s aggressive 0.5% cut in September. Typically, rate cuts are implemented during economic downturns, not expansions. The bond markets seem to agree, as the 10-year yield has risen by approximately 0.7%, contrary to expectations.

Today, bond yields retreated, with the 10-year yield dropping 10 basis points to close at 4.34%. The stock market ended mixed, with the S&P 500 and Nasdaq continuing their rally, while the Dow and Small Caps struggled to break out.

Mega-Cap Tech stocks moved higher, the dollar weakened, which allowed gold to rebound and reclaim its $2,700 level. Bitcoin remained unstoppable, extending its gains, and reaching a new record high.

The chart of the day illustrates that the much-discussed USA Sovereign Default risk has significantly diminished following the election results.

Read More

Markets Surge To Record Highs Following Trump’s Election Victory

Ulli Uncategorized Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

This morning, the markets erupted with major benchmarks racing into record territory following Trump’s presidential election victory.

The Dow led the charge, jumping over 3.5%, while Small Caps surged nearly 6%. The S&P 500 and Nasdaq also set new record highs. Small Caps, which are primarily domestic and cyclical, are expected to benefit significantly from Trump’s proposed tax cuts.

Today’s gains were broad-based, with most investments poised to benefit from a Trump presidency. Tesla surged by 15%, and major banks like JP Morgan, Bank of America, and Wells Fargo saw increases of over 6%.

Bitcoin soared to a new all-time high of over $76,000, while the dollar climbed to its highest level in a year, driven by proposed tariffs that would strengthen the currency.

Bond yields surged, with the 10-year yield adding 15 basis points to reach 4.44%. This increase assumes that new tax cuts and other spending plans will spark economic growth, but also increase deficits and worsen inflation.

For now, sentiment has shifted to a pro-growth, pro-deregulation, and pro-market stance. Traders are also expecting a pickup in mergers and acquisitions (M&A) activity, which will further support a positive backdrop for equities.

Mega-cap tech stocks surged but did not reach record highs, while the most shorted stocks exploded upwards. However, gold struggled due to the dollar’s strength and rising bond yields, leading to a sell-off.

Traders are now anticipating a 0.25% rate cut tomorrow, with a 95% probability in their favor.

Does this mean that bond yields will continue to rise, thereby questioning the wisdom of the Fed’s policy?

Read More