Day Hagan Tech Talk: Sloshing About
A downloadable PDF copy of the Article: Day Hagan Tech Talk: Sloshing About (pdf)
Summary
The S&P 500 uptrend continues. Yet, with domestic elections and geopolitical jitters plus a recalibration of Fed interest rate cut expectations, select equity indices, sector proxies, and well-known Large Cap stocks have been sloshing around for months.
Slosh: Short and Lengthy
I think certain parts of the domestic equity market can be said to be sloshing about. The NASDAQ 100 and Small Cap proxies have moved sideways for weeks/months (NDX and many of the Index Movers) and, in some cases, years (Small Caps and Transports—please reach out for a multiyear chart). In Figures 1 through 3, the green lines are areas of support and the red lines are areas of resistance. Stay apprised and manage risk.
While the equity market makes me uncomfortable with its narrowing again, other areas, such as Mid-caps, are participating in the upside. The Catastrophic Stop Loss Model continues to lean favorably towards its benchmark, the S&P 500. Will this pattern continue until there is a definitive answer to the U.S. Presidential and Congressional elections and interest rates? Probably. However, with our Smart Sector strategies, we manage risk by responding to changes in our models, not someone’s opinion.
Figure 1: Select Domestic Equity Indices – year to date. | Sideways isn’t bearish but a condition to be recognized and worked within. For now, my sense is that these break out to the topside, but not until we know the outcome of the U.S. elections.
Figure 2: Select Domestic Sector Proxies – six-month data. | Our Smart Sector allocation models dictate our decisions relative to our monthly sector allocations. Nonetheless, there is a lot of sloshing.
Figure 3: Select DJIA Components – year to date. | Sloshing, as the DJIA’s bullish chart configuration is approximately two weeks past a record high close. Please manage risk if support is violated.
Note 1: The chart configurations in Figure 3 are not bearish in and of themselves. The charts simply reflect a condition to be recognized and worked within.
Note 2: Initial areas of support for the S&P 500, which has also been trading laterally for almost three weeks (sloshing about), are 5785 to 5765 and 5670+/-. Please reach out for a chart.
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 10.29-30.2024. 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.