The Weekly Trend
The Weekly Trend
Episode 223: Draw 25
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In this weeks episode, David and Ian discuss the new highs in multiple areas across the market, the "interesting" reaction in interest rates after the Fed cut, and the big week for China. Also, if Tech isn't leading the market higher, where is the strength coming from?
Welcome back to the Weekly Trend Podcast. Today is Friday, September 27th, 2024. So, S& P 500 currently sitting at 57. 51. I'm David Zahrling. I'm here with Hurricane Water salesman Ian McMillan. Are you hanging in there in Charlotte with the recent weather?
ian-guest762_17_09-27-2024_113320Yeah, we are obviously not as bad as I'm sure our friends or listeners in Florida or Georgia. South Carolina got it pretty bad but
david_15_09-27-2024_103321Well, I'm glad you guys are okay and I'm hoping the people in the areas you just mentioned are doing okay as well. So last week we talked about Not seeing higher highs in a bear market. It's still the same situation this week.
ian-guest762_17_09-27-2024_113320yeah, more all time highs for S& P and Dow. Russell just still hanging out. I mean, pretty flat for the week, I guess. Good last couple days, but
david_15_09-27-2024_103321Well, I did, I did have someone reach out to me that, that listens to the podcast and as a fellow asset manager, and he did appreciate that since his son or daughter has been born, IWM hasn't been a new highs,
ian-guest762_17_09-27-2024_113320yeah,
david_15_09-27-2024_103321that's how, that that's how long it's been, but holding up well, I mean, it's above two 10 when you look at IWM and that's an important level. And if we could continue to hold that and chew through supply. Which we now know existed from February of 21 through January of 22, that that price formation was all distribution at the same time. The other thesis is the range that took place from that January of 22 through, let's call it early 24 was accumulation. And so now we wait, we have to see, you know, we have a rising 200 day on small caps.
ian-guest762_17_09-27-2024_113320it is rising.
david_15_09-27-2024_103321And time will tell. I mean, these other areas broke through their much sooner, like S& P 500, the Dow Jones. We now have EQAL, which is the Russell 1000 equally weighted. So the top 1000 stocks continuing to hold its breakouts. But yet the narratives continue. I know that you like to talk about bricks in the wall of worry.
ian-guest762_17_09-27-2024_113320Certainly a lot. I mean always plenty in an election year And really I think What's kind of surprising? There have been a lot of bricks in the wall and You know a lot of this Supposed to be lining up with election year seasonality. I know september is usually a pretty weak Month in general. I think I saw us, you know, more specifically the second half of September and We have bucked that trend so far.
david_15_09-27-2024_103321and that's, I think that's an appropriate way to look at seasonality is it's a tendency. And it's not about when stock prices match the seasonality. It's about when they don't. And if the second half of September is supposed to be weak. Now we still have one trading day after today, but we haven't seen that second half of September weakness. And that's something worth paying attention to. That's information to look at and say, Hey, that's a little bit out of the norm or out of the tendency. So is this market stronger than we think? Despite election narratives, revisions to government data on the economy, the assumption of some type of landing yield curve,
ian-guest762_17_09-27-2024_113320Interest rates.
david_15_09-27-2024_103321interest
ian-guest762_17_09-27-2024_113320Yeah, I guess that falls in, you know.
david_15_09-27-2024_103321And I know one that that you've highlighted is just remember the yen carry trade scare.
ian-guest762_17_09-27-2024_113320Yeah, it's from early August. Gosh, we had, we had the rate cut and then rates just started going up again. Can you believe that?
david_15_09-27-2024_103321Well, and then the latest I heard, Ian, is that Chinese stocks going up is bad.
ian-guest762_17_09-27-2024_113320They had a really good week.
david_15_09-27-2024_103321yeah, that seems a little bit odd to say if Chinese stocks are going up, that's bad. When we've had One of the best periods since late October of 23 through now that we've seen in the market and Chinese stocks were going down
ian-guest762_17_09-27-2024_113320Yeah, China at its highest level since, I mean, really, 18 months probably.
david_15_09-27-2024_103321and it reeks this week's move. Now it's still in a downtrend, but this week's move out of Chinese stocks reeks of short closing
ian-guest762_17_09-27-2024_113320Yeah, I can see that. That's a good, that's a good thesis.
david_15_09-27-2024_103321and all short sellers are future buyers. And so if they're closing out those shorts, When you think about demand and supply economic law or demand that supply price goes up more supply demand goes down the end of a bull market typically happens when you run out of buyers and the bear market in chinese equities regardless of your opinion on china if you run out of sellers the same applies
ian-guest762_17_09-27-2024_113320I like that.
david_15_09-27-2024_103321and
ian-guest762_17_09-27-2024_113320are, Chinese stocks really struggled. They had a good start to the year like everything else. Good Q1. Really, really struggled. I you know, the entire summer, May through August. Big move here and that just gets you back. Well, you know, I said earlier to You know highest level in 18 months. It's still the same spot since 2006. I'm looking at fxi
david_15_09-27-2024_103321Okay,
ian-guest762_17_09-27-2024_113320So, you know, that's priced in dollars if you wanted to look at Something not priced in dollars. I guess you could use the s s e composite also same spot since 06 early 07 Same spot since 2015. Definitely, definitely a lost decade for your average Chinese stock.
david_15_09-27-2024_103321and definitely not risk off if a we're seeing chinese stocks stop going down You And B, if they start to build a range or move higher, that's risk on behavior.
ian-guest762_17_09-27-2024_113320Stop going down is the first, is the first step in your Sellers Anonymous meeting.
david_15_09-27-2024_103321Same thing with buyers anonymous. When prices stop going up, that's the first sign that the bull could be over. And these things take time, but higher highs and higher lows continue to confirm a bull market. 200 day moving averages, the backdrop of. A breath thrusts in October, early November of last year, echo, I'll call them echo thrusts or breath thrusts in July oF this year. And we don't have what I would call an extension of breath. Meaning when you look at like bullish percent on the New York stock exchange or bullish percent of the S and P, you don't sit there and say, Oh, we're at an extreme, you know, we're at, we're at 80 or 90. On the bullish percent. And therefore that's where you start to run into risks of stocks falling off one by one, because they've been in unison for so long. Their correlations have been so strong to the upside. We're not there yet. And so there's room here heading into October, which is notoriously volatile. Like to call it a volatility amplifier and volatility can go two directions. But we don't get to be surprised if we continue to build another range through October, stair stepping higher, or some type of another corrective move, you know, cause we, we get 5 percent corrections frequently in markets. We get 7 percent corrections frequently in markets, and we even get 10 percent corrections that are frequent in markets, but we continue to see higher highs, higher lows, rising 200 day moving average. Let's not overcomplicate things.
ian-guest762_17_09-27-2024_113320It is, and it's so easy to Overcomplicate things. It's so easy to make brash decisions, right? Like, I mean, screw it. If Kamala is going to win and I think she's just going to be awful. Like, I mean, I'll just go to cash now. And like people get really ahead of themselves. We saw in 2016, saw it in 2020, and we've seen it for hundreds of years. Markets are, I'm sure people got ahead of themselves back in the. 60s. Maybe not. Maybe, no, maybe no one cared about elections. If there's anyone who traded stocks in the 60s, let us know what your walls of worry were like. I
david_15_09-27-2024_103321Well, Ian, how many, how many elections were not the most important ever?
ian-guest762_17_09-27-2024_113320mean, this one for sure is. It's like ever, ever, ever.
david_15_09-27-2024_103321Right. Mean, while
ian-guest762_17_09-27-2024_113320of our country depends on it.
david_15_09-27-2024_103321right. Well, 2020 was the most important ever before that though. 2016 was the most important, but before that
ian-guest762_17_09-27-2024_113320But before that though, I mean, remember how important 2008 and 2012 were?
david_15_09-27-2024_103321Yeah.
ian-guest762_17_09-27-2024_113320It's the most important ever.
david_15_09-27-2024_103321Right. I mean, the 96 election really
ian-guest762_17_09-27-2024_113320important ever.
david_15_09-27-2024_103321Yeah. Until now
ian-guest762_17_09-27-2024_113320The future of your country depends on this.
david_15_09-27-2024_103321the future of the market. So we digress and sarcastically so, but it's because we humans do a tremendous job of making everything the most important ever. And while elections are important, we do a really good job of trying to make what's upcoming the most important. I'm not saying elections aren't important. They absolutely are. I mean, we live in a,
ian-guest762_17_09-27-2024_1133202028, they're gonna tell you that it's the most important election ever.
david_15_09-27-2024_103321correct. So while we have that bias in us, the beauty of using technical analysis and charts, the study, the visualization of supply and demand is we can see the ramifications of an election. You know, if we, if we're breaking below a 200 day moving average. If we are making lower highs and lower lows, well, yeah, let's take that information in as true Bayesians, take that information and, and, and value it as being, Oh, maybe we're starting to see supply have control over demand. Maybe we've run out of buyers. Maybe they're just selling pressure at this point in time, but to sit in cash at this point, what's your process then for getting back involved? And if you don't have one, and it's just on a hunch. Or what you think, how many times do our thoughts lead us astray? And so you better have an objective process to identify when you're wrong, and technical analysis does that.
ian-guest762_17_09-27-2024_113320Think this That really hit home and I kind of got a chuckle this week. So for the, and my, my story is going to it will play into what you are talking about, Dave.
david_15_09-27-2024_103321Got, we got time for this. Let's do it.
ian-guest762_17_09-27-2024_113320but so we have to do these quarterly memos for the ETF,
david_15_09-27-2024_103321Yep.
ian-guest762_17_09-27-2024_113320Just a compliance thing, and we have to fill out slides. Most of it's data driven and Kevin plops it in there. And really at this point, it's just updating things. But we were joking because one of the slides is a market and economic outlook. We don't provide an economic outlook. You know, and we tell them that it's not part of our process internally, no, nor does it play a role in what the ETF does. So who cares? But the, the market. So this'll be the second time. We also copied and pasted this in May. So we're now in February. There's a memo in late February, a memo in late May, and now here late August. And, yeah, we've just been We've copied and pasted because nothing changed. We remain bullish on us equities, especially with the breakout to new all time highs in January for the S and P 500 NASDAQ 100 and Dow Jones industrial average. As technicians and trend followers, we believe higher highs beget more higher highs until they don't no, this is at that time We have recently experienced one of the strongest four month historical rallies in broad equities with indices bottoming in late october And each of the previous cases this type of move did not occur prior to a major market top In fact, quite the opposite is true This sentiment still remains and our opinions have not changed as long as the s& p500 Remains above 4800 and a 200 day moving average We will remain bullish on the equity market. So if you thought that those were just things that they've got Dave and I got on here and talked about no, but I wonder how frustrated that, I mean, we actually haven't written a new market outlook in nine months
david_15_09-27-2024_103321Yeah.
ian-guest762_17_09-27-2024_113320because I can literally just be like, here, here's what I told you in February. I don't know what else you want from us.
david_15_09-27-2024_103321Right. Ian, have you ever played Uno?
ian-guest762_17_09-27-2024_113320Yeah, my grandmother, my grandmother loved playing Uno.
david_15_09-27-2024_103321So you're, you're sitting playing Uno with, with grandma and all your favorite family and friends. And the card you draw or gets handed to you says, fight the trend or draw 25. What are you doing?
ian-guest762_17_09-27-2024_113320Probably, probably drawn 25.
david_15_09-27-2024_103321drawing 25. My hand, I'll have to use both hands.
ian-guest762_17_09-27-2024_113320And this is how, you know, and I get it. It's, I get it cause I used to do it. Used to pay attention to the headlines. I get it. And I get why emotionally people do it. At some point, you know, building, creating, maintaining wealth has got to be, it's gotta be bigger than the TV.
david_15_09-27-2024_103321Right.
ian-guest762_17_09-27-2024_113320Having a process has got to be bigger than the nightly news.
david_15_09-27-2024_103321Well, do you, I mean, we're not U. S. Senators or House of Representatives, so we don't have inside info, because do you think by watching a certain financial news network or clicking on a certain link gives you an edge? Because by the time it's to that point, it's no longer an edge. And how many
ian-guest762_17_09-27-2024_113320think it's the same of these people that watch ESPN all day. I think it's going to make them better at betting on draft games.
david_15_09-27-2024_103321Yeah, it, by the time that information is there, it's too late, B, it's what the crowd is reading, C, do you know how many times those outlets are used for unloading a position?
ian-guest762_17_09-27-2024_113320Yeah.
david_15_09-27-2024_103321And so, consumer beware.
ian-guest762_17_09-27-2024_113320Or you talk about, right. A lot of headlines out. Oh, about how invested in David Tepper is in China. Well, we'll see. Maybe he wants to get out. I don't know.
david_15_09-27-2024_103321well I was just going to say, he needs people, he needs volume in that market if he's going to participate in it.
ian-guest762_17_09-27-2024_113320And he needs to take down those profits and
david_15_09-27-2024_103321Maybe help the Panthers a little bit.
ian-guest762_17_09-27-2024_113320couple of O Linemen.
david_15_09-27-2024_103321Yeah, he probably needs some a little more protection for his QBs I'm not sure the point remains that Financial news outlets have an interest and it's not yours meaning their job is to get clicks and eyeballs in order to sell razor blades and cars and other things Cause if they don't have viewers, they don't have a product.
ian-guest762_17_09-27-2024_113320Well, and my big thing, 90 percent of them have never done Like, they just went straight from journalism school to, you know, being a gopher or wherever, and then worked their way up, and like, they've never done It's the same with ESPN, like, okay, skip Bayless. Skip Bayless played middle school basketball, and like, now you're going to, like, you care about his opinion on, like, the NBA? Or like, who's the best, who's the worst? It's the same thing.
david_15_09-27-2024_103321So don't get
ian-guest762_17_09-27-2024_113320who cares? These people have never made any type of investment decision outside of what target date fund they've got in their 401k.
david_15_09-27-2024_103321correct. And they're going to sense sensationalize headlines for the now, rather than understanding that the market is a future discounting mechanism, looking out six to 18 months in the future. It's a weighing machine and the day to day price movements. It's those are the trees, the higher highs, higher lows, the rising 200 day moving average. That's the forest. So stop
ian-guest762_17_09-27-2024_113320Yeah,
david_15_09-27-2024_103321staring at the tree and look at the
ian-guest762_17_09-27-2024_113320trees are spooky though.
david_15_09-27-2024_103321Yeah, they can be. I remember when we were in Muir Woods out in California, I think it's Muir, I think that's what it's called, pretty, pretty eerie. I mean, very quiet, but the trees are beautiful, but you got to take it as a collective. You got to take the information as a whole. And so what are we seeing, you know, across the board? We, You know, we were guilty of being S and P 500 focused. Understandably. So one of the best indexes on the planet, it uses momentum,
ian-guest762_17_09-27-2024_113320Yeah, find a, find a new index for me to focus on and
david_15_09-27-2024_103321right?
ian-guest762_17_09-27-2024_113320we'll chat about it.
david_15_09-27-2024_103321And maybe, maybe in Connor's day, your son's day, there'll be a different index. Maybe it'll be in two years. I have no idea. And then we'll focus on that index. But for now, the S and P 500 being one of the most prolific indexes for the past Well, I'm going to say 14 years. That's it's everything's about relative strength. So where are we seeing strength in this market?
ian-guest762_17_09-27-2024_113320I would say a lot of things have, I mean, it's better than we were a month or two ago. Obviously tech, I mean tech as a sector XLK pretty weak.
david_15_09-27-2024_103321Yeah. I mean,
ian-guest762_17_09-27-2024_113320sector today. It's been below a relative 200 day since mid july. Now it hasn't fallen apart. But and yet markets have gone higher over that time i'm not saying it's been the easiest ride but we've gone higher without tech leading and so that would make sense that things under the surface More things would be participating market goes higher Large cap tech not really your leader So I mean something has to be You Pushing the market higher. Gold my, I mean, yeah, gold miners are better. Gold itself. I don't know. Go Matt. I mean, gold miners look good.
david_15_09-27-2024_103321right. And is that risk off?
ian-guest762_17_09-27-2024_113320Probably not.
david_15_09-27-2024_103321And when we look at you, you brought up tech. And if we look at the forest and say, let's look at tech stocks versus S and P stocks,
ian-guest762_17_09-27-2024_113320Yeah.
david_15_09-27-2024_103321and you notice that we run into resistance that has a 24 year memory going back to the 2000 top. And tech has paused here. You're just simply saying that doesn't mean the bull market equities is over. It's just the opportunity to outperform the S and P in using tech is tough at this spot.
ian-guest762_17_09-27-2024_113320But you've had, I mean, then, I mean, you semi semis have had a nice relative recovery.
david_15_09-27-2024_103321Right?
ian-guest762_17_09-27-2024_113320They're back above a relative 200 day. Obviously home builders, aerospace defense,
david_15_09-27-2024_103321Yeah. Aerospace and defense.
ian-guest762_17_09-27-2024_113320which has been pretty good.
david_15_09-27-2024_103321Yeah. I mean, and there's an arrow, there's an aerospace part of that. That's interesting. Like we say aerospace and defense, but when you look at the aerospace, Space, not too shabby. Are we investing in rockets and spaceships? Are we investing in financials and Chinese equities? If the world is about to fall apart,
ian-guest762_17_09-27-2024_113320probably not.
david_15_09-27-2024_103321probably not,
ian-guest762_17_09-27-2024_113320And Bradtat hasn't fallen off. I mean, advanced decline lines are fine. Mean, we're not ripping. We're not ripping. This is not November 2023 through however long that lasted. It was a long, like, end of March. That was cool. That was fun. Although, I mean, what? We've had, like, three red days this month. Well, so I take that back. Since. Three red days in the last, what is that? Three weeks.
david_15_09-27-2024_103321but we've had one negative week in September
ian-guest762_17_09-27-2024_113320Yeah,
david_15_09-27-2024_103321and that was the first week in a. Notoriously weak month seasonally speaking. And if we're bucking that tendency, that's risk on. If we're, if we look across the risk on risk off spectrum and we're buying emerging market tech and emerging market, high yield, like emerging market, high yield moving higher or junk bonds moving higher, or you're, you're more out on the spectrum using something like ICBT, which is. Your credit market for more risk on behavior type tech stocks. Those are moving higher. You've got European financials and a financials across the board moving higher. I know you shared a great chart on Caterpillar industrials moving higher, how you just mentioned housing moving higher, Russell 1000 equally weighted breaking out to new highs. Now you, and now you're sitting on the precipice of transportation stocks, which have been sideways since 2021. So three years of sideways, 0 percent return in transportation stocks. if those are going to confirm and move higher, triple C credit spreads cooling off, I don't know how many more boxes you need to check.
ian-guest762_17_09-27-2024_113320That's quite a few.
david_15_09-27-2024_103321yeah, I mean, I, what's there to complain about, but people love to complain and, and we can be back next week. We can be back below, you know, when you look at the S and P 500. You know, if we're back below 56 60, okay So we continue to build that auction process up and when you look at the auction process From early november last year through now all these i'll call them mini corrections All they've done is caused interactions between buyers and sellers that have moved the process up, have, have moved the auction pricing up. And that's a quality quality characteristic. I'd be a lot more concerned if the point of control in this market was much lower, but the point of control and something like that, some P 500 is currently sitting around 5, 200. Don't, I don't really, I really don't know what else, what else to tell
ian-guest762_17_09-27-2024_113320So does that make you feel like we're more like kind of locked in to stay about 4, 800?
david_15_09-27-2024_103321Yeah, I mean, I do think there's some levels now that are higher than 4800. That you can manage risk with as the way I guess I would put it, you know, you've got
ian-guest762_17_09-27-2024_113320move to 52. 52 50.
david_15_09-27-2024_103321yeah You've got a 200 day moving average at 52 28 on smp cash You have the low in april at 49 70 You have the test of the of a low volume profile near 50 Did you say it 52 50?
ian-guest762_17_09-27-2024_113320Yeah.
david_15_09-27-2024_103321so you have some levels here where if you're if if Selling takes it below those levels. You could say okay You Now the bullish thesis is under threat and you can always take your foot off the gas pedal at those points. But until that, this market is guilty of an uptrend until that point. I mean, a rising 200 day moving average, rising 50 day moving average.
ian-guest762_17_09-27-2024_113320Did you mentioned you, Utah, you mentioned 5,600, right?
david_15_09-27-2024_103321Right.
ian-guest762_17_09-27-2024_113320Yeah. I think below that short term would be a little,
david_15_09-27-2024_103321And I could see that. I could see that in October. I could see us coming back to the 50 day moving average, which is around 5460, 5470, and seeing, making sure we know where the buyers are, because that's all the, that's all this process is, is confirming where the buyers are and where the sellers are. It's called price discovery. Price moves lower until it finds buyers, until it finds demand, and then it moves higher until it finds sellers and it moves lower. That's in the end what price is doing. Cause there's trillions of dollars at work across credit markets, stock markets, we haven't even touched on commodities while you did a little bit. You talked about gold itself
ian-guest762_17_09-27-2024_113320yeah. What about commodities?
david_15_09-27-2024_103321Yeah. I think it's interesting. You know, we talked a little bit about oil last week. And we can continue to test the 65 to 67 level. Be nice to see that hold from that perspective. When you look at energy stocks, they have broken down they're in a downtrend, you have a falling 200 day relative moving average versus the S and P we're below an important horizontal level. So right now, energy stocks are not the place to be. They are an opportunity cost, and that might become more abundant. That might be more abundantly clear. If oil is below that 65 level, but base metals, we saw a strong move out of copper, copper miners an extremely cyclical and industrial metal, industrial metals themselves, some strength. And here we are sitting with the dollar still fighting this 100 level using something like DXY, a trade weighted dollar. Now, if you see that 100 level on the dollar break, now you're talking about trying to go visit 90 or 89 on the trade weighted dollar and you, and then you start wondering, well, what does that mean for anything priced in dollars? Again, this goes back to what we talked about last week. Why are we involved in markets? If the dollar, your purchasing power is moving lower, you want to be involved in things that are protecting against that situation. And equities is a place, some commodities could be a place, that's TBD to be determined, but all these risk on areas tell us it's still a bull market.
ian-guest762_17_09-27-2024_113320I agree with that.
david_15_09-27-2024_103321Even bonds, you know, I mentioned junk bonds, you have AGG, the aggregate bond complex, a retest of the 101 level. We'll see where that leads. But it is interesting. I think you highlighted this last week. You saw TLT rally prior to the rate cut announcement. And since the rate cut announcement, TLT has moved lower. It's almost as if treasuries are also a future discounting mechanism.
ian-guest762_17_09-27-2024_113320It's almost like that was a well known. Yeah. They've gotten, I mean, they're back below that a hundred level. I don't know. And it goes too, like I'm just, I know what my, I know what my multi-decade. Outlook is on bonds. So it doesn't surprise me That's having a hard time getting into any type of uptrend and we've talked about there will be Countertrend moves, there will be uptrends Yeah, I think just a tough tough spot and then of course, you know bonds versus stocks just you can't I mean that is a clean clean if you want to pull up TLT versus SPX and put it slap it 200 day on there You That is a, that's been pretty clean for about three years.
david_15_09-27-2024_103321Yeah. And that's where you're paying the price in a 60 40 portfolio, an opportunity cost price. And it's important to look at ratios. I mean, you look at something risk on risk off, you look at staples versus S& P.
ian-guest762_17_09-27-2024_113320Yeah,
david_15_09-27-2024_103321You look at staples versus discretionary. So while on an absolute basis. XLP staples clearing prior highs from 2020 to moving higher, but underperforming discretionary. Don't know. Are you, are you buying a Tesla rather than buying bleach? Well, that's information. Are you is, you know, cause I know from our internal work here, people still like to buy their shoes. People are still going out to eat. And now you're starting to see a change. In price for airline stocks.
ian-guest762_17_09-27-2024_113320and what would, RTH was gone. Yeah, RTH. I think it's a pretty solid absolute chart. Not great on a relative basis, but I mean that's retail.
david_15_09-27-2024_103321So I, there's really not much else that we can add from a weight of evidence standpoint to highlight how strong this market
ian-guest762_17_09-27-2024_113320Lowe's hit all time highs this week.
david_15_09-27-2024_103321Yeah. Home Depot.
ian-guest762_17_09-27-2024_113320been very strong.
david_15_09-27-2024_103321So risk on evidence across the board. Does that eliminate volatility? Of course not. We're heading into one of the more volatile months. There is in October. Will there be corrective moves during this? Absolutely. But it's the same, you know, back in March, we talked about by the freaking dip, BTFD, that's the environment we're in. And I'll get a lot, I'll get a lot more nervous when. BTFT becomes the mantra across the industry, which is not what we're seeing right now from a sentiment, sentiment perspective.
ian-guest762_17_09-27-2024_113320no, I would say we are very very far from any type of sentiment extreme I mean even if you look at something like Well, let me pull it up. I got it in front of me put call ratio. I
david_15_09-27-2024_103321Okay.
ian-guest762_17_09-27-2024_113320mean, it's still I mean, we're Yeah, I just we haven't had any extreme moves all year. Really?
david_15_09-27-2024_103321Except for maybe the August VIX spike, maybe there was a spike there or in July, but the information can need to continue to stack up and feel like it's appropriate to highlight the supporter of this podcast. The Adaptive Select ETF listed on the NYSE under ticker ADPV, which helps investors access two of the most prevalent factors in markets, momentum and relative strength. Using proprietary identification methods, the Adaptive Select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, Adaptive Select seeks to prevent extended declines by moving to short term treasury bills and cash during long term market downtrends. Investors can find out more, including how to invest in ADPV by visiting adpvetf. com or calling 1 833 880 5200. Investing involves risk, including possible loss of principal. ADPV is distributed by Quasar Distributors LLC. Ian, we are up against The end of our time, but it's our show we could do it everyone any other place You'd like to highlight for our listeners before we sign off for
ian-guest762_17_09-27-2024_113320no, I'm I I mean, it's not a it's not a rip roaring uptrend It's A lot of back and forth and even intraday. But I don't think that takes away. Yeah, I think that's hard to expect this stage off the bottom for sure. But you, I mean, we continue to hold up. There's been. Multiple times where bears could have really done something but just unable to really get any meaningful supply going in In the market and you know, I think in a short intermediate term 5600 is a good line in the sand
david_15_09-27-2024_103321sure We didn't touch base much on crypto, but you look at Bitcoin above Bitcoin above 66, 000 I think that's an important level. You know, we've been trying to chew through supply that sits at 70, 000 we'll use a nice round number And that's been going on since the beginning of the year, but we're above a 200 day moving average now. Now, granted it's a sideways moving average. And so that means a hot mess. So not necessarily a, by very definition, that's a sideways move. That's not a trend. But the fact that that's holding up could be information about what the dollar does here.
ian-guest762_17_09-27-2024_113320that's a good
david_15_09-27-2024_103321it, you know, we can't be surprised when I talk about October being about month of volatility and amplifying volatility. Let's not forget that volatility can happen to the upside and markets do surprising things all the time. The most likely scenario from a seasonal perspective, the tendency would be for some type of sideways range or corrective move in stocks going into the election. But do we really get to be surprised if the dollar is breaking below 100 on a trade weighted basis and we're seeing stocks move much higher during October? I don't think we do.
ian-guest762_17_09-27-2024_113320No, yeah, and then you've got this now you got China coming in Which is a risk on I mean you just mentioned Bitcoin, you know I think you got to put that on the risk on
david_15_09-27-2024_103321Mm hmm.
ian-guest762_17_09-27-2024_113320on bucket. So Yeah, I just I don't see Okay, let me Let me ask you this. There's what like, okay, what what cracks do you see? What? Like so not Just anything right now that makes you say, Eh, this is not as strong as an uptrend.
david_15_09-27-2024_103321Yeah, I like this, this, so I love this because this makes my heart go pitter patter because we should always be like a good defensive end, head on a swivel when we get through the offensive line super easy. So think some potential red flags, you mentioned tech no longer being an opportunity versus SMP when you look at the big boys. So the SMP is at new highs, but you look at Microsoft, not at a new high, you look at Apple, Not at a new high, you look at Meta trying, trying to, and it actually did this week, create a new high. You look at Google, not a new high.
ian-guest762_17_09-27-2024_113320No.
david_15_09-27-2024_103321You look at Amazon, not at a new high. So the very large pieces of the S& P 500 You could even use XLG, which is the largest 50 stocks of the S& P 500, or OEF, which is the largest 100 stocks of the S& P 500. Those are not at new highs, and so that's called divergent behavior. And if those type of stocks don't want to lead, that's one thesis that could say, okay, is this distribution? The other way to look at it, I will put a caveat in here, is that's sitting in the hip pocket. So all game long, Pat Mahomes has not played well, you're still winning. Like that scenario because All it takes is Pat Mahomes starting to play well, and now things are dominant. And so we'll see. I mean, that would, for me, those would be some of the potential red flags. Maybe another one would be how cool the VIX is, meaning it's cooled off since it spikes in July and August. Does it rear its head again going into October that we get an increase in volatility and some downside? Could be. How about you? What are, what would you say are I would, if I can, if I can, I would add another one and that would be if transportation stocks can't clear 70, 70 bucks. Think
ian-guest762_17_09-27-2024_113320You're using IYT?
david_15_09-27-2024_103321yeah, I'm using IYT, but when you look at that formation going back to 2021, it's very constructive. But if it can't do it, it goes back to the adage, if something should do something and it doesn't, That's where you pay attention. So if IYT can't clear 70 when it looks like it, it should,
ian-guest762_17_09-27-2024_113320Huh.
david_15_09-27-2024_103321that would be information. And if we're back below a 200 day moving average, if we're back below the, the, the flush that happened in August, which is at 61. 80
ian-guest762_17_09-27-2024_113320Yeah,
david_15_09-27-2024_103321if we're back below that and that's a failure probably hard times for the market probably
ian-guest762_17_09-27-2024_113320probably.
david_15_09-27-2024_103321what about you?
ian-guest762_17_09-27-2024_113320So, really, I don't know, I want to see Russell get above 225. And I don't, I don't
david_15_09-27-2024_103321We're gonna have a party if if when russell if russell clears 244 243 feel like we should have a party for him like congratulations on moving out of the house
ian-guest762_17_09-27-2024_113320know, last time we had a party, he back in 2021, he trashed it.
david_15_09-27-2024_103321Yeah, he did. Table was set,
ian-guest762_17_09-27-2024_113320whole thing.
david_15_09-27-2024_103321really nice setup on the table, chips and dip and appetizers and chicken wings and a good quality beer and he came in and flipped the table.
ian-guest762_17_09-27-2024_113320Yeah.
david_15_09-27-2024_103321No, I think that's a good point. Anything else?
ian-guest762_17_09-27-2024_113320I think every, well, S& P and Dow are the only stocks back at all time highs. Both have RSI divergences.
david_15_09-27-2024_103321so some momentum divergences, that's fair.
ian-guest762_17_09-27-2024_113320not like the worst, you know, divergences. Can diverge for a long time. Dao actually. Think it's fascinating that Dao's like, looks the best. But it's relative chart is so bad.
david_15_09-27-2024_103321Well then what does that say about the S& P then?
ian-guest762_17_09-27-2024_113320Yeah. Yeah?
david_15_09-27-2024_103321on an absolute basis, the Dow looked fantastic. On a relative basis, it's an opportunity cost. Which then we can say, Oh, that means there's more strength here in the S and P 500 than we thought, regardless of how it looks.
ian-guest762_17_09-27-2024_113320Yeah? I would, I would agree with that.
david_15_09-27-2024_103321Okay. Anything else you want to highlight for our listeners before we wrap it up? If not, and you're listening to this and you really appreciate the information, one, one of the ways that you could pay us back is sharing it with others giving us a high ranking on whatever your favorite podcast platform is of choice is where I cross all of them. We hope you guys enjoyed this episode and thanks Ian for being on here again with me this week and I, and I hope you guys stay dry.
ian-guest762_17_09-27-2024_113320Thank you. Hey, have a great weekend everyone.