The U.S Indices Are at Critical Junctures

Ahead of the FOMC’s September 20, 2023 meeting, rate decisions, and subsequent press conference, various market indices are at critical junctures. The market is betting heavily on the Fed holding the rate at 5.50%, so the indecision shown by the indices is due to uncertainty about the larger picture. It is possible that the FOMC’s…

A Quick $SPX Analysis

The S&P 500 is trending up since bottoming on October 13, 2022. It has cleared a few critical resistance levels and broken above bullish chart patterns since then. The probability is high that the upswing will go on for some time. Monthly Timeframe Fig 1. tells a good story of the S&P 500. The logarithmic…

Equity Indexes Testing Resistance

On Wednesday, July 27, 2022, the FOMC raised the Fed Funds rate for the fourth time this year. The next day, the Bureau of Economic Analysis  (BEA) announced that the 2022 Second Quarter GDP declined by 0.9%. Finally, to close out the week, the BEA reported that the Core PCE rose by 4.8% from a…

Relative Strength Analysis and Changing Market Leadership

The current bull market, which started in March 2020, is beginning another leg up, but the market leadership has changed slightly. The discretionary sectors are now doing better than the defensive sectors. Small caps and transports are getting to the market leadership position. It behooves to change the portfolio mix, and it is time to get overweight on the leading sectors and underweight on the lagging sectors.

November 2021 – Market At a Glance

Seasonally, November begins a better period for the equity market. There is a strong possibility that it could live up to its reputation this year, and we may see a healthy year-end rally in the stocks.

The Technical Analysis informs us that major U.S. equity indices are on the verge of breaking above their previous highs. Some are coming out of bullish chart patterns and can rise by 5-10% over the next few months. Weekly new highs are trending higher, and the Advance/Decline lines are improving too.

Business Cycle and Sector Rotation

Some business sectors perform better during certain stages of an economic cycle and some during others. To take advantage of these regularly occurring business and economic fluctuations, we need to know when a sector typically outperforms and when it underperforms. The Business Cycle model tells us when an industrial sector has a greater probability of outperforming the market. The sector rotation approach guides us in taking money out of underperforming sectors and putting it into outperforming sectors.