Just yesterday we wrote, “The stock market is attempting to rally off of last weeks lows. Based on the internal “math of the market,” an upgrade to a yellow condition is close at hand. But not just yet.”
This morning the S&P500 and Nasdaq are bolting above their respective 21-day mavs on huge volume. Perhaps the market is jubilant in an act of celebration for the Texas Rangers winning their first ever World Series last night! 🙂 Congrats to Ranger nation!
While the market had a good day yesterday, it appears to want to have an even better one today based on the massive volume surge already. An “about-face on the day after a Fed decision” is still possible, technically, but is not very likely apart from some geo-political scare coming out of leftfield later in the day. So far we like how “tomorrow” is going.
If the strong start continues and holds throughout the day, the S&P500 will experience its own follow-through day, which means conditions are improving technically and demands attention by investors. It will still be very important to see zero “distribution days” within the next 3 trading days.
Before you throw all caution to the wind, remember tomorrow’s release of the October U.S. payroll report is coming. While the upgrade (to yellow only) has arrived, the risks to stocks is still high at the moment. We don’t feel the need to list each of the threats facing investors now as they are well known.
A proper “low, rally, retest” sequence over the 2 – 3 weeks that leads to a “higher low” in a retest would work wonders to improve our level of confidence in this fledgling rally. But ultimately the math of the market (the internals) which measures the footprints of (big) money is our infallible guide.
Our Current Market Outlook has been upgraded to “Uptrend Under Pressure” with a yellow light as of 10am (SPX 4,286.30). Our “Core Four” (see top of page) sits with 2 yellow and 2 red lights. The VIX is knifing under it’s 50-day (bullish!).
The next few days will be very telling. The 21-day mavs are a source of resistance – no rally can succeed without getting over and staying over them. Climbing interest rates are still a growing threat as the Treasury will be offering BILLONS in new debt later this month – keep an eye on the 10-year US T-note yield. The economy is facing a difficult environment due to a determined Fed, while the third quarter earnings season rolls merrily along.
Finally, we continue to be deeply grieved by the heinous attacks on Israel. Please join us in praying for the families that have lost loved ones and in asking the Lord Jesus to bring justice upon those that were responsible for the atrocities.
“I was glad when they said to me, “Let us go to the house of the Lord.” Our feet are standing within your gates, O Jerusalem, Jerusalem, that is built as a city that is compact together; to which the tribes go up, even the tribes of the Lord— an ordinance for Israel— to give thanks to the name of the Lord.
For there thrones were set for judgment, the thrones of the house of David. Pray for the peace of Jerusalem: “May they prosper who love you. “May peace be within your walls, and prosperity within your palaces.” For the sake of my brothers and my friends, I will now say, “May peace be within you.” For the sake of the house of the Lord our God, I will seek your good. Psalm 122 NASB 1995
Game plan: Watch closely to see if the bears resist much at the 21-day mav level within the next 3 days. Continue monitoring the current rally attempt for technical staying power. Begin deploying capital to work in the strongest ideas from your watch list. Please pray for Israel.
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.
Where Are Woodward and Bernstein When We Need Them? This article was written by Newt