Day Hagan Tech Talk: Following the Best Week in 2024
A downloadable PDF copy of the Article: Day Hagan Tech Talk: Following the Best Week in 2024 (pdf)
Summary
Two weeks ago, the S&P 500 (SPX) experienced its worst weekly decline in 2024. Last week, SPX experienced its best weekly gain in 2024. Similar reversals have been more bullish than bearish. Equity’s reaction to the Fed’s interest rate decision doesn’t appear to change that belief.
Tale of Two Cities
Two weeks ago, the S&P 500 (SPX) was down over 4% in its worst weekly decline in 2024—the worst of times. Last week, the S&P 500 experienced its best weekly gain in 2024, up over 4%—the best of times. According to Jason Goepfert, “Over the decades, similar reversals have been more bullish than bearish.” Interestingly, before the Fed’s 50-basis-point cut on Wednesday, the S&P 500 Equal Weight Index, DJIA, and most Advance-Decline Lines had already closed in new high territory, effectively leading the Large Cap Technology-weighted SPX higher—Figure 1.
Figure 1: Percent of S&P 500 Stocks Outperforming the S&P 500 over the Past Three Months. | This depicts the broadening of the equity market beyond the Index Movers (Large Cap Growth/Technology).
Figure 2 carries the theme further (more parts of the equity market are participating, besides Large Cap Growth/Technology), but on a sector basis. Measured from the SPX’s previous closing high on 7.16.24. Please note the SPX, Energy, and Technology returns—the last three bars on the right.
Figure 2: S&P Sector ETF Performance between 7.16.24 and 9.19.24. | Eye opening, if I may say so.
S&P 500: Range Bound No More
Notwithstanding a close back below 5650+/- (i.e., a false upside breakout, and bearish), from a price perspective only two price objectives may be discerned, based on the depth of the completed bases.
With the end of quarter/new quarter approaching, I would expect more price volatility, both ways.
Figure 3: S&P 500. | Non-trading targets and support.
Please let me know if you would like to schedule a call to discuss the process and discipline underpinning our Smart Sector with Catastrophic Stop, Smart Sector International, and/or Smart Sector Fixed Income strategies. Disclosures and Fact sheets can be found here: https://dhfunds.com/literature.
Day Hagan Asset Management appreciates being part of your business, either through our research efforts or investment strategies. Please let us know how we can further support you.
Art Huprich, CMT®
Chief Market Technician
Day Hagan Asset Management
—Written 9.18-19.2024. Chart source: Stockcharts.com unless otherwise noted.
Future Online Events
Disclosure
The data and analysis contained herein are provided “as is” and without warranty of any kind, either express or implied. Day Hagan Asset Management (DHAM), any of its affiliates or employees, or any third-party data provider, shall not have any liability for any loss sustained by anyone who has relied on the information contained in any Day Hagan Asset Management literature or marketing materials. All opinions expressed herein are subject to change without notice, and you should always obtain current information and perform due diligence before investing. DHAM accounts that DHAM, or its affiliated companies manage, or their respective shareholders, directors, officers and/or employees, may have long or short positions in the securities discussed herein and may purchase or sell such securities without notice. The securities mentioned in this document may not be eligible for sale in some states or countries, nor be suitable for all types of investors; their value and income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.
Investment advisory services offered through Donald L. Hagan, LLC, a SEC registered investment advisory firm. Accounts held at Raymond James and Associates, Inc. (member NYSE, SIPC) and Charles Schwab & Co., Inc. (member FINRA, SIPC). Day Hagan Asset Management is a dba of Donald L. Hagan, LLC.