Our Smart Sector models, which update today, recommended overweighting China at the beginning of the month. Despite election worries, when we combine our Smart Sector strategies with our weight-of-the-evidence approach, the Bulls remain in control.

The Catastrophic Stop model is unchanged this week at 65.7%. The Internal Composite is bullish, and the External Composite is neutral. The model continues to support a fully invested position. With the S&P 500 near all-time highs, the model has correctly maintained a risk-on stance YTD.

The Catastrophic Stop model is unchanged this week at 65.7%. The Internal Composite is bullish, and the External Composite is neutral.

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.

The Catastrophic Stop model increased to 65.7% from 55.7% last week. The Internal Composite (price-related indicators) is positive, and the External Composite remains neutral.

Fed watchers and prognosticators continue to lather on about whether the Fed is behind the curve and whether it should cut 25 basis points (bps) or 50bps on 9/18/24. At Day Hagan, we rely on our models and charts, not opinion, for guidance.

The Catastrophic Stop model currently sits at 55.7%. The Internal and External composites are neutral.

Despite favorable trend and breadth evidence, we recognize that seasonality may introduce periods of weakness as September progresses. Our immediate focus will be on the market’s reaction to tomorrow’s employment report and the FOMC decision slated for 9.18.24. We remain focused on risk management at current levels.

The Catastrophic Stop model held steady at 48.6%. The Internal and External composites are neutral.

Following the “Powell Pivot” last week, Wall Street continued to favor the Non-Index Movers (non-growth/technology/value type) over the Index Movers (large cap growth/technology). Consequently, we have a lot to focus on.

The Catastrophic Stop model held steady at 48.6%.  The Internal and External Composites are neutral.

Despite the equity market rally, which went up faster than expected, the S&P 500’s uptrend is intact but overbought (condition, not a signal). For 2024 the Catastrophic Stop model has been positive, and we are aligned accordingly. If our models shift bearish, we will raise cash.

The Catastrophic Stop model declined to 48.6% from 53.6% last week. The Internal and External composites are neutral.

The market might retest last week’s lows after its rebound, but with the upcoming economic data and potential developments in the news cycle this week, it’s difficult to predict which way it will go.

The Catastrophic Stop model declined slightly to 53.6% from 60.7% last week. The Internal and External composites are neutral.

Wall Street experienced its own version of Hurricane Debby due to sector and stock rotation, position unwind, seasonal headwind, economic and EPS growth concerns, geopolitical concerns, machine trading, liquidity concerns, and widening credit spreads (Figure 1).

We are monitoring economic growth closely, as that is the driving force behind the recent decline (among myriad other factors). The quantitative, unemotional outlook confirms that economic growth is decelerating but still positive overall. Inflation pressures continue to diminish. The model is positive, and we are aligned with the message. If our models shift to bearish levels, we will raise cash.

The Catastrophic Stop model held steady at 82.9%, the same level as last week. The majority of Internal and External indicators remain bullish.

This presentation discusses the current financial market trends, stock market corrections, Small Caps, sentiment, The Great Unwind, International and Emerging markets, seasonality, and more. Financial advisors are encouraged to watch this presentation replay for a comprehensive understanding of the market trends and indicators.

The Catastrophic Stop model increased to 82.9% from 77.9% last week. The Internal and External composites are bullish.