Special Bulletin: July 15, 2024

Rotation, Rotation, Rotation / Fight! Fight! Fight!

Everyone knows the three most important words in real estate are: “location, location, location!” Well, in the stock market it appears that the three most important words are “rotation, rotation, rotation!” And if you think about it, they are very similar. “Location” is where everyone wants to be now, and “rotation” is where institutions are going now. Suffice it to say, last week was a classic example of institutional rotation in the stock market.

“Out with the old and in with the new?” Sellers came into the tech names last week and took profits, in particular in some of the Mag 7. But rather than pull the $ out of stocks entirely (and run for the exits), they plowed those sales proceeds back into small cap names and financials, among others. This is a positive development for the current uptrend as it should prolong the advance rather than stall it. But it will take more evidence than just a day or two of rotation to confirm this observation/activity will persist.

If last week’s rotation attempt starts to sputter and reverse, it will be visible to the trained market participant’s eye. Watch for leading stocks to advance sharply and then do a total about face and begin to crumble in price. Also keep a keen eye on the net NYSE advance/decline numbers each day. A positive net relationship would confirm a broader rally is still underway. Negative daily readings would suggest the opposite.

Our Current Market Outlook remains “Uptrend Under Pressure” with a yellow light based on our Core Four which has 2 green and 2 red lights. We stated last week and want to reiterate an important point for new readers to our posts: our yellow condition is still seen as a bullish bias but with cautionary caveats applied. We recognize that a meaningful uptrend is in process, but we also acknowledge that the risks have increased for a sharp pullback (or even an eventual full reversal to a downtrend). That is basically what “yellow” means.

Three other words have become prominent, even paramount, in the past couple of days: “Fight! Fight! Fight!” We were horrified by the images from PA this past weekend regarding the attempt to take President Trump’s life. We are so grateful to God for Supernaturally intervening and sparing his life. We are grieved for the family of the slain fireman who selflessly used his body to shield his wife and daughter. We are praying for the healing of the other two men who were also shot.

For those with spiritually discerning eyes, it is obvious that we just witnessed evidence of God’s existence and intervention here on earth. I personally believe that God is always at work in the affairs of men. This weekend’s events reminded me of a similar true story that happened to General George Washington. What follows is an excerpt from an article written by Mr. Harold Pease in The Independent on Feb. 13, 2020.

When safely at Fort Cumberland, Washington wrote his younger brother John Augustine Washington July 18, 1755, “By the All-Powerful Dispensations of Providence, I have been protected beyond all human probability or expectation; for I had four bullets through my coat, and two horses shot under me, yet escaped unhurt, although death was leveling my companions on every side of me!” Washington wrote the same to his mother Mary Ball Washington.

Fifteen years later, Washington and Dr. Craik, a personal physician and close friend, were traveling through those same woods near the Ohio river and Great Kanawha river. They were met by an old Indian chief who addressed Washington through an interpreter with the following story:

“I am a chief and ruler over my tribes. My influence extends to the waters of the great lakes and to the far blue mountains. I have traveled a long and weary path that I might see the young warrior of the great battle. It was on the day when the white man’s blood mixed with the streams of our forests that I first beheld this Chief. I called to my young men and said, mark yon tall and daring warrior? He is not of the red-coat tribe – he hath an Indian’s wisdom, and his warriors fight as we do – himself alone exposed. Quick, let your aim be certain, and he dies. Our rifles were leveled, rifles which, but for you, knew not how to miss – `twas all in vain, a power mightier far than we, shielded you.” One warrior declared: “I had seventeen fair fires at him with my rifle and after all could not bring him to the ground! Seeing you were under the special guardianship of the Great Spirit, we immediately ceased to fire at you.”

Then his prophecy: “I am old and soon shall be gathered to the great council fire of my fathers in the land of shades, but ere I go, there is something bids me speak in the voice of prophecy: Listen! The Great Spirit protects that man and guides his destinies – he will become the chief of nations, and a people yet unborn will hail him as the founder of a mighty empire. I am come to pay homage to the man who is the particular favorite of Heaven, and who can never die in battle” (“The man who could not be killed,” George Washington Parke Curtis, Recollections and Private Memoirs of Washington, Philadelphia, J.W. Bradley, 1859).

The chief’s prophecy came true. Perhaps it is time to be less dismissive and more inclusive of the hand of God in the affairs of this nation. https://suindependent.com/indian-legend-george-washingtons-divine-protection/

Our sentiments exactly, Mr. Pease. Praise Jesus! And may each of us also have the courage and wisdom to “Fight! Fight! Fight!” against the evil in this world.

“Let those be ashamed and dishonored who seek my life; Let those be turned back and humiliated who devise evil against me.” Psalm 35:4 NASB 1995

“Evil men do not understand justice, but those who seek the Lord understand all things.” Proverbs 28:5 NASB 1995

Game plan: The trend remains up, but certain internal technical numbers suggest it won’t last forever. Be prudent. Be prayerful. Your future and mine, all of ours, depend on it. Pray for the peace of Jerusalem (Psalm 122:6-7). May they prosper who love her.

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ®