The Weekly Trend
The Weekly Trend is a conversation on various publicly-traded markets, seen through the eyes of technical analysis.
The Weekly Trend
Episode 224: Keep It Simple
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In this weeks episode, David and Ian discuss the strong performance seen from China, recent movements in Energy and the U.S. Dollar and what that means for the equity markets, developments in Retail, and keeping is simple with using technical analysis.
Welcome back to the Weekly Trend Podcast. Today is October 4th, 2024, S& P 500 currently sitting at 5711. I'm David Zierling. I'm here with Ian Gamecock McMillan. First of all, Ian, what is a Gamecock?
ian-guest633_19_10-04-2024_114507It's like a fighting rooster, like cockfights.
david_17_10-04-2024_104511Yeah, it sounds ferocious. I mean,
ian-guest633_19_10-04-2024_114507Yeah, I mean, pretty gruesome, I mean, it's like dogfighting, but with chickens.
david_17_10-04-2024_104511Yeah,
ian-guest633_19_10-04-2024_114507And then they put, like, metal spurs on their legs, so they scratch each other and cut each other open.
david_17_10-04-2024_104511yeah, so it's a pretty sinister mascot for the South Carolina team and you guys have Ole Miss this weekend
ian-guest633_19_10-04-2024_114507Ole Miss, the Rebels, I don't know if we're allowed to call them Rebels. I know that was a thing a couple years ago. You know how
david_17_10-04-2024_104511Yeah,
ian-guest633_19_10-04-2024_114507some people are sports mascots.
david_17_10-04-2024_104511Yeah, it's kind of wild and here and here we have SAP 500 Unchanged week to week, but a little bit of price movement intra week, but plenty to analyze here Underneath the surface that's worth paying attention to. Yeah.
ian-guest633_19_10-04-2024_114507Came down and, you know, tested this I'll call it 5, 700, just to use a round number, which were the highs from July and August. So, we've talked about that for a few weeks. It's kind of your intermediate term line in the sand to use. And buyers so far come in or we needed them to,
david_17_10-04-2024_104511And we have continue to see rising 200 day averages for many areas in us markets. We, we've held, held these short term levels that you just mentioned. We're seeing. Indices that are equally weighted. You know, we talk about the S& P 500 and most think of it as being the cap weighted, big, big boy club
ian-guest633_19_10-04-2024_114507you know,
david_17_10-04-2024_104511have market capitalization. But when you look at it on an equally weighted basis, a nice range has been built at new highs for something like RSP representing weight S& P 500. And so a quality characteristic, and we just recorded a positive month of September. Which is bucking a seasonal trend. Most of September's, whether it's election year or not are negative for a market. And we had a positive one and that's another box checked for
ian-guest633_19_10-04-2024_114507especially that second half. I mean, I think we got into earlier September, definitely the first few days of September were pretty, were wonky. Right. So then, and I think I saw this, correct me if I'm wrong, but that's, that's September weakness usually comes in the second two weeks
david_17_10-04-2024_104511Yes,
ian-guest633_19_10-04-2024_114507of the month.
david_17_10-04-2024_104511Ryan Dietrich does good work on
ian-guest633_19_10-04-2024_114507Yeah. And yet we, I mean, on September 17th, we were breaking to an all time high. So, and we've held above there. Yeah, and I think there's been improvement under the surface. Still not a hard flip. You know, I'm not, like, not saying, yep, it's a, it's a clear go for small caps and mid caps. But healthy, it's certainly, this has not been an, this has not been a mega cap thing.
david_17_10-04-2024_104511Correct. You, when you look at the last three months tech has not led during that period. And so that means other things have had to carry this market higher. And when you combine that with a positive September, that's definitely information worth paying attention to. And here we are heading into one of the most volatile months. Of October, then sets us up for what is notoriously the strongest six months period, November through April. And so if you have a market that's resilient again in October, it does make you wonder how strong November through April could potentially be. With the caveat that seasonality is not a predictor. It's about what happens during that timeframe matches or not match. You could, you could go, we could be resilient into November and then November through April are negative. And that would be
ian-guest633_19_10-04-2024_114507That would be concerning. China,
david_17_10-04-2024_104511be massive information, but we continue to have higher highs and higher lows and rising 200 day moving averages. And you have areas even like China that have been in massive. Massive downtrends.
ian-guest633_19_10-04-2024_114507quite the, yeah, so big week last week. That has not slowed down. Another very strong week. Now, when we look at a relative chart, especially a longer term relative chart, let's keep in mind that China has Severely, severely underperformed for over a decade. So it has been a nice move short term, very intriguing. Absolutely would not be shocked if we, you know, in two or three years are looking back on like, oh yeah, that was a big, it was a big bull market for China. So, two caveats to that that come to my mind. You know, oh my gosh, are you missing? I don't think you've missed it on anything in China yet
david_17_10-04-2024_104511Yeah. If
ian-guest633_19_10-04-2024_114507At least not from a relative perspective
david_17_10-04-2024_104511yeah. If this is going to turn the corner, it's going to take time. This would just be the initial phase. This would be watching the boat leave the Harbor and somehow think that you've missed it. A whole journey ahead here that still has to play out.
ian-guest633_19_10-04-2024_114507Put this in perspective compared to u. s stocks us or china has it's in a 15 foot hole and we dug out maybe one or two feet over the last couple weeks There's a long ways to go. I it's definitely intriguing But if you're yeah, if you're sitting there thinking like, oh my gosh, I missed this You know, whatever they are two weeks. They're up in a lot 30 40 40 percent if you look at fxi fxi is up 43 percent
david_17_10-04-2024_104511in two weeks
ian-guest633_19_10-04-2024_114507in two weeks
david_17_10-04-2024_104511and prior to that, to paint the picture for our listeners, FXI versus S and P has been in a downtrend since October of 07. At its depths was minus 90%.
ian-guest633_19_10-04-2024_114507Congrats
david_17_10-04-2024_104511This, this move, this 40% move it back to minus 87%. So while there is signs, there is plenty of work to do and plenty of opportunity if it were to continue,
ian-guest633_19_10-04-2024_114507Yeah, and I think you've got and now you've had such a big move Dave that I mean for me you kind of move into like, okay now this What are we doing for the next six months?
david_17_10-04-2024_104511Right? Because we are hit, we are hitting some. Levels
ian-guest633_19_10-04-2024_114507and you're gonna have to work off some of this hot, this Thanksgiving, this Thanksgiving food that they put in their belly.
david_17_10-04-2024_104511yeah,
ian-guest633_19_10-04-2024_114507You're gonna have to work some of this off sideways, either through price or time, somehow, if you want it to be a healthy long term uptrend. You
david_17_10-04-2024_104511a barge does not turn like a sports car. And if China's going to turn around here, that's fine. It will just take time and people shouldn't feel like, oh, I missed out because
ian-guest633_19_10-04-2024_114507didn't miss out. I mean, David Tepper's long, so you kind of missed out, I guess.
david_17_10-04-2024_104511Yeah, I think you said it well, before we hopped on to record that, Tepper's opinion and his opinion all of a sudden is about loading up on China. He's got a job to do too, and that's to create a market. And you just have to be careful because the networks that they're on don't have your best interest in mind. And so you, you just be careful now. Could China can continue to move higher? Absolutely. Are there levels that you can manage risk with? That's a little bit harder,
ian-guest633_19_10-04-2024_114507Yeah.
david_17_10-04-2024_104511they're there. If you can, if you look underneath the surface or you use parameters that might not be except FXI, other tools. That you might be able to take advantage, but bigger picture, how risk off is it if Chinese high risk stocks moving higher and is not, it's just
ian-guest633_19_10-04-2024_114507It's not.
david_17_10-04-2024_104511It's another box being checked. Of risk on behavior you're buying Chinese tech stocks. Okay, that's not you don't hide out there That's not where you go when the world is ending.
ian-guest633_19_10-04-2024_114507I, no. I would completely agree. I think you brought up a good chart yesterday, Dave, of credit spreads.
david_17_10-04-2024_104511Yeah, we could continue to see triple c credit spreads break down which is a Cooling off and easing of liquidity. It makes it easier for you know, I know you've done a lot of analysis on let's just say energy stocks In the United States, are companies that take on debt to carry out their, their mandates it's getting easier for them to access cash rather than harder. So you're seeing a risk on barometer, triple C credit spreads continue to indicate risk on. So not a negative thing for sure. where, where else are we seeing, you know, outside of China strength?
ian-guest633_19_10-04-2024_114507I think we're seeing you know, financials continue to Financials had a good week this week. Continue to, you know, they're trying to put in a relative base as well. I mean, really, when we Energy Energy's had a good week.
david_17_10-04-2024_104511And energy is one that's interesting when you consider where oil appears to be finding demand.
ian-guest633_19_10-04-2024_114507Yeah,
david_17_10-04-2024_104511you look at oil and we previously talked in previous episodes about this 65 to 67 level, we've responded there, oil has moved higher and what's some might find interesting is the dollar also moving higher. But what we need to remember, and it's really not all that far fetched, is that for quite a while now, the dollar has been highly correlated to energy. And if you want a macro story on that, America's become one of the best energy producers on the planet.
ian-guest633_19_10-04-2024_114507Sure.
david_17_10-04-2024_104511And for quite a few years under the previous administration in this country, it was a net exporter. I don't know if that's true currently. But if you think about the process of buying energy, buying natural gas, liquefied natural gas, buying oil, if you're going to that market, you have to buy the currency of what that's in first in order to purchase that thing. So do we really get to be surprised of an environment where the dollar's moving higher and energy's moving higher? We don't cause they're highly correlated right now. And that correlation can change. can absolutely change. But when you see a trade weighted dollar moving higher, You typically are also seeing energy move higher, and we might be getting both of those things and some might say, well, that's negative for equities. Well, it depends on equity. It depends on which stock we're talking about. It can be, but what does it, what does it tell us? If there's some strength and energy strength in emerging markets with a strong dollar. That's
ian-guest633_19_10-04-2024_114507And you got strength in gold with a strong dollar.
david_17_10-04-2024_104511Yeah, that's information. We're sitting up and taking notice and saying, Oh, okay. There's
ian-guest633_19_10-04-2024_114507dollar back to 102. I mean, we just cannot break one we cannot break 100 on this thing. We've been going at it for two and a half years. One, two, three, four, five, six, seven, eight, I mean, nine attempts. Two years, a lot of those, I mean, a lot of those here in the last six weeks. No dice.
david_17_10-04-2024_104511you did a good job highlighting this week. You know, we talked about China, but we also talked about Germany. What are we seeing out of the DAX?
ian-guest633_19_10-04-2024_114507Very strong.
david_17_10-04-2024_104511And again, it's another one on a relative basis. Nothing to write to grandma about, but on an absolute basis and highly correlated moving higher. That's information that DAX is recording all time highs.
ian-guest633_19_10-04-2024_114507Looks great. Likely not going to outperform the S& P, so Use those two data points to come with to the conclusion.
david_17_10-04-2024_104511Yeah. That's it. That's the way we think about it. absolutely right. Is it nice that the DAX is in an absolute uptrend? It is.
ian-guest633_19_10-04-2024_114507Sweet.
david_17_10-04-2024_104511it, is it a place where you can be on a relevant basis? Not so much. It becomes an opportunity cost. That's why model makeup or portfolio makeup is important. Yeah, you could own the DAX, but you're better off owning the S& P 500 at this point, and that will change. There will be a decade where that changes. I don't know when, but there will be a day where Conor is talking about the German DAX or international stocks.
ian-guest633_19_10-04-2024_114507So to our German friends and investors I would like to say congratulations or As they say in the native tongue, Gluckwunsch.
david_17_10-04-2024_104511Ooh, okay. I like
ian-guest633_19_10-04-2024_114507I didn't know that. I had to go to Google Translate real quick.
david_17_10-04-2024_104511Google Translate's nice. It helps.
ian-guest633_19_10-04-2024_114507Gluckwunsch. Congratulations. Germany, you're an all time high.
david_17_10-04-2024_104511That's great. I, again, all time highs are not a characteristic of bear markets, but they are a characteristic of bull markets. So we have, we have things like seeing demand. We're seeing the dollar move higher along with energy. We have technology sitting in the hip pocket. What I mean by that is it's, if your team is having success with Pat Mahomes on the bench, And Pat Holmes has a chance to come back in the game. How much happier are you as a fan? Same thing with the market. If your leaders have been on the bench and the team continues to do well, that's tremendous. That's a tremendous backdrop. And when you have weight S& P, equal weight NASDAQ, you even have equal weight Russell 1000 at new highs. That is bull market behavior. Despite the narratives of our day,
ian-guest633_19_10-04-2024_114507Yeah. And, since beginning of July, Apple is actually slightly negative. You got the S& P up over 3%. You say even when it's three months, I mean, hey, three months, 3%. That's, I mean, annualize that to what, 12? That's above average. You get an above average, you know, period for the market and the most importance and basically Pat Mahomes. Didn't play a single snap.
david_17_10-04-2024_104511It's amazing.
ian-guest633_19_10-04-2024_114507And the team won the game. I'm not saying that they won 49 to nothing. Team won the game.
david_17_10-04-2024_104511Yep. So it's a good it's a it's a quality characteristic to see things like Energy, I mean even biotech right?
ian-guest633_19_10-04-2024_114507Biotech? I
david_17_10-04-2024_104511all sorts of tech going on biotech showing some Resiliency here, especially if we look at something like you highlighted on the team this week arc cue, right? The Kathy narrative has definitely died down she was the The pinata for months on end I get why, but I haven't heard anything on that in a while. And here we are with our Q above a really important near 61 on a base that's been two and a half years in the making. Also risk on, are we really hiding out in biotech stocks? things are bad, probably
ian-guest633_19_10-04-2024_114507what about retail stocks? All time high.
david_17_10-04-2024_104511Yeah,
ian-guest633_19_10-04-2024_114507And your Costco's, your Walmart, obviously, I mean, well, and see, here is the thing. This doesn't include Amazon. Amazon hasn't done anything for, since, I mean, we're going on six months. Amazon, flat Amazon,
david_17_10-04-2024_104511yep.
ian-guest633_19_10-04-2024_114507your home depots, your lows. Yeah, it's healthy. And now you've got, I pretty, I think JD is in RTH. So that's your big China name. That's now come, I mean, that's at a huge, yeah. That's at a huge move. Almost up a hundred percent from 25 to 45. It's just, and you haven't seen, I will, I will say one relationship I kind of am still waiting on is the high beta verse
david_17_10-04-2024_104511I thought you would go there
ian-guest633_19_10-04-2024_114507low vol but it's holding in there and like, you know, where is that? We talk about this a lot, Dave, like it is nice. Look at these relationships for clues. You still got a default to, you know, like I'm not hanging out in cash because I don't like the high beta low vol relationship.
david_17_10-04-2024_104511right? Yep. You can't do that. Not not when you have A way to measure trend in two ways and they're both confirming which is one looking at price levels Higher highs and higher lows and you have a rising 200 day moving average That means demand has control of this market. And that doesn't mean October can't have its correction. I mean, is notorious for having pullbacks. We can definitely have that now. Well, people use that as an opportunity to do their homework and look where the strength is, if, and when that happens, typically not because people are lazy, that goes back to what we talked about in March, which is this, it's a BTFD environment until further notice.
ian-guest633_19_10-04-2024_114507It is.
david_17_10-04-2024_104511So with that, I want to highlight the supporter of this podcast, the adaptive select ETF, which is listed on the NYSE under ticker ADPV, 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. 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. 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. Where else we want to highlight for our listeners? What other areas, we touched on the dollar, we touched on China, we talked about Equal Weight Stocks,
ian-guest633_19_10-04-2024_114507Oh, what about our where are we at with like the precious metal stuff
david_17_10-04-2024_104511Yeah, I think, I think you said it well last week or even the last several weeks that when you look at precious metal by itself, whether it's gold or silver, their uptrends are great when you look at them in a relative basis versus S and P they remain in a range. it's, it's a battle there as far as whether that's an opportunity cost or an opportunity advantage. And I think the same can be said for gold miners. But I will say that it's notable, as you alluded to before, see gold move higher while the dollar is strong, and to
ian-guest633_19_10-04-2024_114507and what? Yeah. And we've got silver making all time highs today or SLV is
david_17_10-04-2024_104511yes, yeah, if you, I mean, even futures are making new cycle highs, they're
ian-guest633_19_10-04-2024_114507cycle eyes. Okay. Yeah. I didn't zoom back enough.
david_17_10-04-2024_104511Yeah, they're not, they're not breaking the August highs, but if gold did it first, August 2011 highs, if gold did it first,
ian-guest633_19_10-04-2024_114507Yeah.
david_17_10-04-2024_104511there's, there's always a period of time where, when precious metals are doing well, you typically see silver do better than gold, and you typically, typically see silver miners do better than gold miners. And then isn't a precious metal, but it's an industrial metal seeing what copper and copper miners are doing recently also risk on type behavior. I mean, copper futures are flirting with all time highs go back
ian-guest633_19_10-04-2024_114507On the back. I'm sure on a lot of this on the back of the China. But as the chart, it makes sense. I mean,
david_17_10-04-2024_104511And when you, when you look at something like cop X versus S and P it's in a range that goes back to 21, the beginning of 2021. One. If this range breaks to the upside, I mean, that's, that's game on. That is cyclically economically important metal. And
ian-guest633_19_10-04-2024_114507globally, yeah. Like globally, you're going to get a nice, well in this, when's the last time we had a big push in copper? Oh, three to Oh seven.
david_17_10-04-2024_104511And
ian-guest633_19_10-04-2024_114507I mean, we've had other big, you know, okay. Obviously 2020, the rebound in Oh nine Oh 10 or 10, but as far, I mean, but those didn't change the range.
david_17_10-04-2024_104511correct. And that's when you saw I'll perform when
ian-guest633_19_10-04-2024_114507International I mean, yeah, industrials, golly, you even had utilities outperformed for like three or four years. And we were in a, we were in a bull market. Another thing I want to bring up, that I think is very important to hammer home on why you follow charts versus, I wouldn't even put it in the narrative category cause it did happen. And we did get a rate cut. And what happened to rates directly after? Moves started moving right back up.
david_17_10-04-2024_104511Yep.
ian-guest633_19_10-04-2024_114507Bonds sitting, bonds sitting at one month lows. Especially the further you go out on the duration. I look at a TLT we are back to where we were late July. I know that when you hear rate cut, you think that bonds will go higher. It's not really how it works in the short term. So we'll see how this continues to play out, but they cut, I mean, and just, God, when, when you're a technician and you can look at the chart and see where all this lined up, not like, it's really not shocking
david_17_10-04-2024_104511No, it's not. You're there's no surprise here.
ian-guest633_19_10-04-2024_114507and that's why there was never any move into long duration bonds.
david_17_10-04-2024_104511Correct.
ian-guest633_19_10-04-2024_114507And so again, on a relative basis here, they actually did, you know, bonds did try to make a move, but on a relative basis, I mean, a couple more bad days, we're going to be a year at all time relative lows.
david_17_10-04-2024_104511Right.
ian-guest633_19_10-04-2024_114507And so to your point, Dave, what does that tell you about the S& P?
david_17_10-04-2024_104511Strong, baby.
ian-guest633_19_10-04-2024_114507It's strong. They don't want, they're not going to move into risk off assets yet. Not, not to, so you say, well, Ian, you just talked about gold. Okay. We've moved into the gold. Okay. But the demand for gold is not outpacing the demand for, for, for us equities.
david_17_10-04-2024_104511Correct that there's more demand and there are periods of time such as 2005 through 2008 where gold does outperform the S& P. So equities are moving higher, gold is moving higher. But gold is outpacing
ian-guest633_19_10-04-2024_114507Yeah,
david_17_10-04-2024_104511could be a precursor to a risk off event and we're just not seeing that that's just not a thing and I get it. I know there's a ton of different narratives that are out there, it's the election assassination attempts in the Middle East.
ian-guest633_19_10-04-2024_114507yeah. War in the middle of hurricanes
david_17_10-04-2024_104511hurricanes, war in Ukraine, you name it, closure of ports, all these things, and the market is a beautiful mechanism for weighing information and is looking, is a discounting mechanism looking out 6 to 18 months. And right now the market is pointing higher and do we get to be surprised when, man, we were starting, like some of these economic numbers that are coming in are surprising the upside. Well, the market's been forecasting that for awhile. We don't get to be surprised by that.
ian-guest633_19_10-04-2024_114507And like, and I, you know, I think we do, we've done a very good job of this in 2024 being bullish at the same time, recognizing we're not sitting here and saying that everything is hunky dory with. The economy or, you know, the expenses of things. I always want to make sure we harp on that. So, you know, clients or other people listening to this don't think we're getting on here and ignoring other issues going on in America or the world. What's happening at home. You and I say it every week, everyone goes to the grocery store. It's impossible not to notice. But again, the market is not, Not necessarily the economy, I would say, outside of like the extremes. And so I, I, I just don't want people to be frustrated. We are, I mean, we've been both lash on equities for a very long, I mean, really coming up on a year now. But I, I don't wanna what's the best word here? Make it yeah. Make it seem like everything is just grand and the world, but it's another point that the gotta follow the market trend and not headlines or the other things that you're fretting about in your life. I know there's a very long winded way of saying that, but,
david_17_10-04-2024_104511Yeah. The mark, the market doesn't care what we think.
ian-guest633_19_10-04-2024_114507and I see a lot of comments out there of like, how can you, and I've got friends, like I literally have friends who are like, how can you be positive on the stock market? And the answer of, well, we're above 4, 800 is simplistically, it's, it's not, it's, it's not really enough for 90, like, it's not enough for people.
david_17_10-04-2024_104511Yeah. It's, it's hard to,
ian-guest633_19_10-04-2024_114507There's no depth in that. There is no depth in that answer. It's a line.
david_17_10-04-2024_104511yeah, people, enjoy complex explanations.
ian-guest633_19_10-04-2024_114507Yeah. Why Ian? Because it's a line I drew on a digital chart on my computer. That's why.
david_17_10-04-2024_104511It's, it's simply all, all the visualization, all these charts are the visualization of supply and demand. And what we know as law, right, this is not an opinion, that when there's more demand than supply, price moves higher. And we just saw. EqualWeight Tech, EqualWeight S& P, EqualWeight Russell 1000 have enough demand to push it above prior highs where sellers had been and move, and move prices higher. QQ, EW, EQAL, basically 0 percent return for three years,
ian-guest633_19_10-04-2024_114507So how can you call that a raging bull market?
david_17_10-04-2024_104511correct? It's not. And you have things setting up again, and things happening underneath the surface such as one of the largest energy companies in the world,
ian-guest633_19_10-04-2024_114507Yeah.
david_17_10-04-2024_104511ExxonMobil,
ian-guest633_19_10-04-2024_114507Yeah. Good call.
david_17_10-04-2024_104511living in a range, going out to brand new all time highs, so ExxonMobil, brand new all time highs on a weekly and daily and monthly closing basis. And it's sitting only 30 percent higher than it was in January of 2008.
ian-guest633_19_10-04-2024_114507Wow. 16 years.
david_17_10-04-2024_10451116 years, percent return.
ian-guest633_19_10-04-2024_114507So that's what, one and a half, if you extract, like one and a half a year? Probably.
david_17_10-04-2024_104511yeah, if you did it that way, yeah. It's RSI, measurement of momentum in a bullish range, going out to new highs, like how bad are. Things economically, if the largest energy company, one of the largest energy companies in the world is breaking out to new highs. And I'm not saying that it's an opportunity advantage versus S and P, but it might be, this is what it might start to look like if we look at that relationship. And if we're above prior lows that we just had. Near point zero two in that relationship. You could easily see this start to move higher
ian-guest633_19_10-04-2024_114507I just, how can you look at a chart like Exxon Mobil, And, and I'll preface this, I mean, we could be on here in two weeks and be like, yeah, Exxon level sucks. That was a fail breakout. You gotta change our opinion on some things. But yeah, it's a big one. I put it up there with the JP Morgan.
david_17_10-04-2024_104511Yep,
ian-guest633_19_10-04-2024_114507It's an important, you know, thing that you wanna see going in the right direction.
david_17_10-04-2024_104511For sure And so we have we have all this evidence upon us that continues to point to yes We could see near term correction in october, but you're heading into the best six month window of a 12 month period In november through april and especially so after election regardless of who gets elected I mean, I know we all have our favorite candidate. I know who mine is. That's an easy vote. But regardless if that person wins or loses, the November through April period after election is substantially stronger, seasonality speaking, than the November through April, which is already strong any other year. And so you're, you're, you're telling me that if October is weak, that it's all over now, it could be, but use price levels. If we're below a 200 day moving average, you know, the support of this podcast, the adaptive select ETF uses tools like that to identify when risk is higher than it is right now.
ian-guest633_19_10-04-2024_114507Hey, those guys are trend followers. They know when to get out.
david_17_10-04-2024_104511right there, it, you will never be out at the top and you will never be in at the bottom. Trend following is being part of the trend, hopping in the boat when the river is moving fast. And when the river moves against you, getting out of the boat, but it's
ian-guest633_19_10-04-2024_114507Capitalizing on that, like 90%. But you can
david_17_10-04-2024_104511and, and, and here we are, we're still only 11 months removed from the breath thrusts that we saw in November of last year. We're only a few months removed from the breath thrusts we saw in July, and we're still sitting at a quality position on where breath is right now. We have advanced decline line going out to new highs. We have the bullish percent sitting at midfield. You know, we're not talking about a bullish percent that's sitting in the 80s or 90s when correlations start to go to one and you start to see stocks fall off. We're not there yet. We
ian-guest633_19_10-04-2024_114507day. Okay. So, oh my gosh. Thank you so much for bringing that up So you said 11 months, right? It's yeah the breath thrusts the early November breath thrust And so, and I should, I should go back and find some, I'm, I'm, zero doubt I can go back to Dietrich. But so, and we've, we touch on this from time to time. So at that, like, think of all the data points that were coming out at that time. Oh, if this holds, you know, let's look at stock six and 12 months later. And you look at the numbers and you're like, holy cow, that's like, awesome. And way below, way above average. And here we are, almost 12 months later, S& P's up 32 percent since then, Nasdaq's up 30, Small Cap's up 29, and you're like, holy cow, that was like way above average, and you're like, well yeah, that's what the, that's what the data said last November should happen.
david_17_10-04-2024_104511Yeah. It's a great point.
ian-guest633_19_10-04-2024_114507So it's like, hey, you better participate, I'm sorry if things, Politically aren't going the way you want or you know, whatever but I can't got it And this is this is what's happened for 100 100 plus years 150 years stock market since they opened the doors of the stock market.
david_17_10-04-2024_104511The, the, the market does not care about the narrative of the day. It's the other way around them. The wet streets don't cause rain. market moves first and then there's a narrative. Like we could be looking six to 12 months out from now and China's even higher than it is now. And there's going to be a narrative that's built around that. could see the stock market lower. You could see the S and P 500 a 200 day moving average. You could see it below 5, 600. You could see it below the lows over summer. And then we could start talking about the trend changing. And then there will be an area of around that, but the market moves first and we continue to see the leaders lead things. Things like Nvidia compressing
ian-guest633_19_10-04-2024_114507Yeah
david_17_10-04-2024_104511price getting tighter and tighter and and you you've got After a substantial move, and that'll be one to keep an eye on if, if Nvidia, if a leader in this market is below its summer lows in August. then we, then we maybe have to revisit the downward thesis. But if we're going to here and move higher consolidations typically resolved in the, in the direction of the trend. And let's say it does initially resolve that way and then flips the other way. That's also information.
ian-guest633_19_10-04-2024_114507Yeah,
david_17_10-04-2024_104511So all we have to do is study price and not overcomplicate things. Life is complicated enough the way it is. Why make it harder by studying data points often get revised
ian-guest633_19_10-04-2024_114507or turning into conference calls
david_17_10-04-2024_104511Right.
ian-guest633_19_10-04-2024_114507Or reading someone else's opinion on seeking alpha about some stock
david_17_10-04-2024_104511just use, just use supply and demand. Keep it simple. It's the
ian-guest633_19_10-04-2024_114507and I say that because i've done it
david_17_10-04-2024_104511Right?
ian-guest633_19_10-04-2024_114507that to be a hater I say that because You I've done that. I've looked up, you know, little biotech stocks with the cutting edge, you know, drugs that are in phase two trials. And
david_17_10-04-2024_104511Right.
ian-guest633_19_10-04-2024_114507it's, it is long term. It is, it's not worth it.
david_17_10-04-2024_104511That's right. And, and, and nobody has a crystal ball. Nobody has future information. All I know is that price is the closest to the future that you can get, which is the current. All these other data points are from the past. Price, when taken in aggregate as a Bayesian and, aggregated that way, we have an understanding of what the market dynamics are currently. And while, while we, while the bullish thesis is intact, what studying supply and demand does is it allows you to understand when that thesis is wrong. And I wish I, I wish I had that in other aspects of my life, you know, in, in, in relationships, it would be great to have technical analysis to understand I'm not hearing things correctly when I'm not understanding the information at hand. And sometimes we don't have that,
ian-guest633_19_10-04-2024_114507Are you trying to say you want, you want TA for your life?
david_17_10-04-2024_104511maybe,
ian-guest633_19_10-04-2024_114507Could see where she's on the chart. Oh, we had, we had a breakdown today. So I'm going to be pretty chill when I walked through the door and I get home
david_17_10-04-2024_104511correct. Exactly. Like if we could keep things a little bit more simple and understand that the power of technical analysis is it doesn't predict the future, it just gives you the information on odds, which are right now are higher, higher highs and higher lows. And also gives you information on when that thesis is wrong. And here we have a simple tool, like a 200 day moving average on something like the S& P 500, if you use S& P 500 cash, that 200 day moving average is currently at 52. 50. So you can use that as a tool to understand when does demand start taking more control of this market, and we're just not there yet. We're just not. And I, I hate to break it to people, I don't, I, it's not any more sexy than that. I know there's sexier narratives out there, I get it. And I know there's personal experiences that drive our opinions on the market. You could be having a bad day, week, month, year because of what's going on at work, what's going on in your relationships, and that manifests itself on your opinion on what's going on in the market because some people tie the market to the economy. When that's not the case, it's a future discounting mechanism. It's actually working in advance of the economy. We just have to be careful as investors not to consume things that are on TV, things that are on social media that warp our perceptions and create all sorts of noise in our lives. Just focus on the signal. Focus on the signal. Avoid the noise. Be involved with markets until the thesis breaks.
ian-guest633_19_10-04-2024_114507and money, money and investing is such a high. Emotion touchy subject as it is. And I think that goes back to how, how can you just check in on a chart a couple of times a day to decide if you're going to do anything that is. Astronomically since, you know, simple, you're sitting there saying, Ian, like, I could train a monkey to do that. Yes. Yes, you, I'm not gonna, I am not gonna disagree. You could train a monkey to do that. 95 percent of people just don't have the, are not willing to make it that not, this sounds weird, but, It's gotta be, it's gotta be more for people. It's gotta be more complex. There's gotta be something more than line go up, line go down. Like you're a caveman and you're just drawing hieroglyphics.
david_17_10-04-2024_104511So let's not overcomplicate it. Let's keep it simple. So with that, Ian, bumming up against the end of our time. Anything else you want to highlight before we wrap it up?
ian-guest633_19_10-04-2024_114507I don't have anything to wrap up.
david_17_10-04-2024_104511All right, awesome. Well, we appreciate everybody listening. If you appreciate that information, please share it with others. Give us a high ranking That's a compliment to us and we really appreciate it. Thanks for being on here with me
ian-guest633_19_10-04-2024_114507Have a great weekend, everyone.