The stock market has caught itself so far this week in response to Powell’s speech last Friday and in front of key economic data coming this Thursday & Friday. As of 10am, the SPX crossed over a key price level on higher volume which has caused our Current Market Outlook to be upgraded to a yellow condition (SPX @ 4,453.51). Our “Core Four” (see top of page) has 2 yellow and 2 red lights. The VIX has fallen below its 50-day mav, our bullish tie-breaker.
(The rest of this post will be uploaded this afternoon as we have a fully blocked afternoon schedule. Please check back later.)
(The rest of the post now follows. We apologize for the delay. A team member of ours needed medical attention today. Prayers were answered! Thank you for your patience.)
As the second half of this post in being written after the close, we now see that the major stock indexes did indeed rise above and close over their respective 50-day mav’s. While the volume was below average (not very robust), it was higher than yesterday’s and therefore qualified the day as a “follow-through” day, a sign of institutional accumulation, thereby giving hope for a possible resumption of the year to date rally.
The next 3 days are crucial for this new advance. Historically, if serious professional selling (aka. distribution) happens within 3 days of a follow-through day signal, it can be enough to torpedo a new rally and often leads to lower prices. Now overlay that with the fact that important inflation data is coming in each of the next 3 days. Perhaps a “market that doesn’t fall apart is a market that should win your heart?”
One more item to note: our Core Four actually ended the day with 1 green, 1 yellow and 2 red lights, further confirming our cautious buy signal (upgrade to yellow) from this morning. The Core Four at the top of this post (2 red & 2 yellow – with a VIX under its 50-day) reflects our initial upgrade as of 10am.
“Then they themselves also will answer, ‘Lord, when did we see You hungry, or thirsty, or a stranger, or naked, or sick, or in prison, and did not take care of You?’ Then He will answer them, ‘Truly I say to you, to the extent that you did not do it to one of the least of these, you did not do it to Me.’ These will go away into eternal punishment, but the righteous into eternal life.” Matthew 25:44-46 NASB 1995
Game plan: If the market can hold its 50-day mav today, and build on this rally attempt through Friday, an uptrend would resume. Begin deploying capital in the strongest names on your watch list as they move through key areas of resistance. Beware of last week’s “Nathan short” pattern if the economic news is received badly on Thursday and Friday.
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. ©2023 Triumphant Portfolio Management, LLC.
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