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The Triumphant Core Four

NYSE Internals
Moving Averages
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Investor Sentiment

Special Bulletin: April 4, 2024


April Showers or Stormy Weather?

We see a “low (downward) pressure” system fast approaching for the stock market. The question now is will it be just a gentle shower or a more violent storm? The market seems to be sputtering on the diminishing fumes of rate-cut hopes for June. The stock market (as measured by the major indexes) remains priced for perfection.

At 9:31 am on Tuesday (4/2/24) our Current Market Outlook was downgraded to “Uptrend Under pressure” with a yellow light. Here is what we posted on our C.M.O. landing page, “Our Current Market Outlook has been downgraded to “Uptrend Under Pressure” with a yellow light as of 9:31am on 04/02/24 (SPX 5,203.73). The general stock market indexes will test their 10 and 21-day mav’s today. Yesterday was a technically disappointing day as the “first day of the month inflows” combined with the PCE news from Good Friday didn’t even cause a meaningful up day. Be careful at this juncture. The trend remains up but now with caution. Remember, no rally can fail without getting below the 21-day mav but no rally can go higher without being over it. Interest rates are arguing with stocks and are suggesting a recession is coming – keep an eye on the 10-year US T-note yield. The economy is slowing while the stock market is climbing – expect volatility.”

That condition/signal remains in effect. A quick pullback to the 50-day mav’s of the Nasdaq and S&P500 indexes would be very normal and resemble an expected, gentle April shower.

However, if/when that event occurs, if the stock market doesn’t find immediate price support (institutional demand) then investors need to recognize that condition as a “tornado watch” and begin to prepare their exit strategy. This would NOT be a full-fledged “tornado warning,” though, but could ultimately lead to one. It’s fruitless to try to predict that in advance. If this sequence begins to play out, study how the storm builds (the selling), and respond accordingly in appropriate calculated moves that are intended to keep you in sync with the prevailing trend.

Our Current Market Outlook remains “Uptrend Under Pressure” with a yellow light and was triggered as of 9:31am on Tuesday, April 2nd (SPX 5,203.73). Our “Core Four” (see top of page) has weakened and now sports 1 green, 1 yellow and 2 red lights with a VIX that is launching over its 50-day mav. 

On March 20th we wrote, “Regarding the extremely high level of investor optimism (sentiment), it is important to understand that that technical indicator is often early, and that it does a better job at identifying bottoms than it does tops in the stock market. They say it takes a long time to stop a speeding freight train. The same is true of a bull market. The last time this indicator spoke this loudly was in the summer of 2021 and the market grinded higher for a few more months before peaking in Nov/Dec.

Remember that tops are a process. There aren’t many of the necessary ingredients coming together yet that would indicate that one is eminent. But it is no doubt closer than it was yesterday. That’s kind of like the “rapture.” 

Those insights still apply. Do you know where your umbrella is? More importantly, do you have a storm shelter in place?

“For ground that drinks the rain which often falls on it and brings forth vegetation useful to those for whose sake it is also tilled, receives a blessing from God;…” Hebrews 6:7 NASB 1995

Game plan: The trendlines of the major indexes are still properly stacked but the closing prices of the major indexes have sliced below their 10 & 21-day mav’s confirming our “Uptrend Under Pressure” signal from Tuesday. Watch to see if the stock market makes a big snap-back rally attempt to get back over the 21-day mav, or if a “violent-3” begins to unfold and drives the indexes to their 50-day mav’s. Please 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! ® 

The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2024 Triumphant Portfolio Management, LLC.

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