Weekly Report

We are not quite oversold enough to say that a bottom is in – stochastics need a bit more time.  Let’s see if XLV can rally from here – a move up to 144 or above would tend to repair this chart.

We have been looking for this decline, and if things continue to work as we forecast, this coming week should be choppy and indicators should then set up for a rally Thanksgiving week.  we would use CORN for portfolios if you want an interesting commodity allocation.

We would use another down day to start or add to positions in equities. TLT is still trying to rally, and a close above 91.10 would suggest this is going to hold and rally next week. The big item of interest is GLD, which closed (of course!) at 240, our key number for support.

Indicators are such that we could see a week or two of consolidation.  Small Cap has continued to show accumulation improvement.

We will have lots to talk about on tomorrow’s weekly call with the election of Donald J. Trump as president for a second term along with the Republicans gaining control of the Senate and potentially the House.

This is the last Weekly before the election, and it is still impossible to say the market is suggesting which candidate will win. Of the two stocks being removed from the Dow 30 Industrials, we think that INTC is a better bet for a stock leaving the index and outperform, but use risk management.

From the market’s point of view, in our opinion, the result of this election is still a tossup.

We talk about Biotech, an area we want to watch for a buying opportunity just before the 2024 election.  We look at uranium, a key component of “green energy”, which should perform well over the next year regardless of which candidate wins the election.

Where we have been surprised is TLT, which has moved down through support and effectively stopped us out of long positions.

We continue to see SPY up and outperforming QQQ, and IJR.  We show the monthly chart of UUP back to 2008, so you can see that the dollar has been in a long-term uptrend. This is interesting because most of the popular press suggests the trend on the dollar has been down.

TLT trading is as we anticipated, and above 95.40 it should test 97 to 98.  It is possible that XLF made a short-term peak on positive earnings news Tuesday.

TLT is set up for a sharp rally, and this might impact stocks negatively, as they are still trading in opposite directions.

We believe that Chinese stocks are discounting an end to the recession in China. This often happens in the US markets – they bottom in the midst of economic weakness.

This has not been a “major sell” but rather a hiccup caused in part by rotation out of Tech into other sectors.  TNX has short-term resistance from 40 to 42, and through this would target 50, which we think could surprise the markets.

In stocks, we have been looking for a September/October sell off. This is trying to occur, but in some ways the market is a bit stronger than we have been expecting.  Watch for good prices in Healthcare and add to this group, as it hit our 2024 price target easily, and should be strong in 2025.

The condition of the Transport index, plus the Accumulation Models on the major indexes, makes us cautious for 2025.  Our favorite two international markets are Japan and India.

We are looking for a strong advance into the end of the year after this pullback.  If you have been looking to buy TLT for a move into yearend, you can try to buy it here.

We are looking at trading indicators for a good selling indication, and we are close.  Recall we are looking for a sharp pullback into October, followed by a decent yearend rally.  Our two favorite countries are still India and Japan, but China has moved from a “no, no” to an aggressive buy in our work.

We maintain our outlook, a decline from this general area into October, followed by a rally into the election and into yearend.

The market rallied last week as we forecast, but it was a bit more volatile, and in some respects not as strong as we were expecting.  We continue to see signs of rotation out of Technology, a plus for the markets.