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.
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.
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.
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.
The key thing to look at is the way QQQ is trading – it is holding short-term support but has not rallied as much as we thought it could. TLT is finally through 100, but there is still some resistance in this general area.
This pullback should have more to run, but the beginning of this week, if not the whole week, should be up. We believe that if there is to be a real transition away from fossil fuels, energy generation will come from what we have called a “cocktail” of sources – and one of the most important components of this will be nuclear.
In last week’s Chartbook, we noticed several Dividend ETFs had perked up. This is in line with our forecast that this area of the market would improve in the second half of 2024.
We continue to hold extra cash, for a buy point later this year, while ultimately expecting higher prices into the end of 2024. We do want to mention that XLF, XLV, and XLI, sectors we have been recommending all year, are doing better than Tech short-term.
We have looked at the indicators, and it still looks as if we could see a dip from this area, starting later in the week, that will lead to a buying opportunity in late September to early October. Our fixed income forecast continues to be a drop in rates into the end of 2024, then potential problems in 2025. The Yen looks to be starting a basing pattern that could last for several years.
The message here is to be a bit careful of Tech holdings, have some benchmarks in for trading positions especially, and also to deploy new money into other sectors.
