Happy September 21st to all of you Earth, Wind & Fire fans. Earth, Wind & Fire put out some high-quality funk music. Today’s market has some funky action, but not in the feel-good type of way outside of the Mag 7. I’ve been highlighting the underlying weakness within the major indexes, with about 65% of the indexes trading below the 50-day. Yet we’ve seen this action before because the Mag 7 is ripping up 3.3% led by Meta up 11.75%. The one Mag 7 stock I’m long, GOOGL, is also up a healthy 1.9%. Semi’s are strong led by agentic semi’s – AMD, INTC, and ARM due to the new Meta AI model that benefits agentic semis. Former #1 loved semi SNDK is down 1.90%. Probably due to China’s memory stock CXMT’s will produce more NAND memory chips.
The big macro help is crude dropping hard on stories of some sort of US-Iran dialog, Trump saying he’d be open to meeting Iran’s President at the UN, and hopes for cooperation on various issues, including AI, with US and China. With the mid-term elections ~6 weeks away, the Trump administration needs a few wins and meaningful deliverables badly. I support stronger US-China relations, as the opposite could escalate negatively for both sides, with significant collateral damage globally. The big caveat is that we’ve seen too many times grand pronouncements with little meaningful follow-through on everything mentioned above.
One chart I showed on Friday’s webinar was the ratio chart of the Mag 7 vs. S&P with a pending Sequential sell Countdown 13. The 13 qualified today, and I posted the chart below. The Mag 7 has a few more days with its own Sequential Countdown. The S&P index is on day 11 of 13 with the Sequential. It’s getting late in the Countdowns on what has been working, where money is flowing now. Conversely, the S&P and Nasdaq 100 equal-weight indexes are barely moving off recent lows. Those talking about broadening have been quiet recently. The S&P isn’t far from a new high, but only 5 stocks are hitting 52-week highs, and 26 are hitting 52-week lows. The Nasdaq 100 has only 2 new 52-week highs (AMD and WBD) and 3 new 52-week lows. Funky action.
We’ve seen many times that stocks get going on the upside and attract stock nomads who move from one green stock to another day-to-day. It’s just the nature of the current funky market environment.
Quick Market Views
Stocks: The S&P is up 1.4%, and most sectors are underperforming due to the Mag 7 dominance, led by Meta up 11.75%. Tech, telco, and communications are outperforming. Energy is down, which is not a surprise. Transports are down on the day even with lower crude. It will take a lot more downside to reverse gasoline, diesel, and jet fuel, especially with refiners running at max capacity.
Bonds: Rates are down but off the lows. 2’s are nearly flat, 10s are up 3bps, 30s are up 3bps.
Commodities: Mixed. Energy is weak, with Crude down 5.4%; grains are very strong; copper is up 1%; gold and silver are down nearly 1%.
Currencies: The US Dollar Index is up 0.15%. Bitcoin is up 6%, with the Sequential now on day 8 of 13 shown on First Call each day
Current Portfolio Ideas:
Changes: I will increase the FXI and KWEB longs from 3% to 5%. Perhaps if there is some cooperation with China these can work higher from here. I will also close the DASH and ABNB trading shorts with 25% and 9% solid gains. See charts below.
US INDEXES
S&P futures 60-minute tactical time frame with upside Countdown 13’s and short term RSI very overbought
S&P 500 Index daily has had one of the few upside Sequential Countdowns in progress and is now getting late on day 11 of 13
RSP S&P Equal Weight is not really showing the participation of a broadening tape
Nasdaq 100 futures 60-minute tactical time frame with a new Combo 13 and Sequential on hour 10 of 13
Nasdaq 100 Index daily having a few strong days nearing the old high from early June. Seeing so few stocks with 52 week highs (just 2) is concerning
QQQE Equal Weight NDX having a good day but it’s now a corrective wave 2 of 5 bounce unless the wave 5 high is surpassed.
mag 7 update
Mag 7 has moved mostly sideways from April and now has a Sequential on day 10 of 13 so a little more upside is possible.
Mag 7 vs SPY with new Sequential sell Countdown 13 and sell Setup on day 8 of 9
Current Portfolio
SMH Semiconductor ETF has mostly moved sideways after making a high back in June
SNDK with a lower high wave 2. I have added using the shotgun approach vs. rifle sniper, adding to strength. This one was a mess in Q2, even though it reduced short exposure at 1000 to 1% but added back to max weight near the highs, covering with very good gains making up for the Q2 nightmare. I will continue to hold this MU and SKHY short.
INTC is a funky one as it goes up more on potential deals vs actual results. I covered the majority of this messy stock at or under 100 and might add to this once the crowd moves on to the next one.
DASH down off the highs where I added it with max weight with the plan to trade this as it dropped. This still has a downside Sequential while holding the 200 day. Happy to lock in the gain
Similar to DASH but not as large of gain this has downside Sequential however will be happy to ring the register. Adding to this to max weight at the highs worked out for this trade.
KWEB and FXI could be making higher low wave 2’s as they held the TDST Support lines. BABA remains my favorite name here too
Hedge Fund Telemetry ETF Percentage Price Oscillator Monitor
The PPO monitor (percentage price oscillator) force ranks ETFs by percentage above/below the 50-day moving average. This monitor and others are offered to Hedge Fund Telemetry subscribers on Bloomberg.
Index ETF and select factor performance
ETF with today’s performance with 5-day, 1-month, and 1-year rolling performance YTD. Speculative juices are flowing
Goldman Sachs Most Shorted baskets vs. S&P Indexes
This monitor has the S&P indexes and the Goldman Sachs most shorted baskets. Short baskets are seeing some squeezing some sectors
DeMark Observations
Within the S&P 500, the DeMark Sequential and Combo Countdown 13s and 12/13s on daily and weekly periods. Green = buy Setups/Countdowns, Red = sell Setups/Countdowns. Price flips are helpful to see reversals up (green) and down (red) for idea generation. The extra letters at the end of the symbols are just a Bloomberg thing. Worth noting: Seeing buy Countdown 13’s in the most oversold sectors. Watch for reversals to show up on the price flip up column in green in the coming days. A lot of buy Setup 9’s as well which should see a bounce however the risk of continuation down will see Sequential Countdown’s begin.
Major ETFs among a 160+ ETF universe. Same story as above
If you have any questions or comments, please email us. Data sources: Bloomberg, DeMark Analytics, Goldman Sachs, Street Account, Vital Knowledge, Daily Sentiment Index, and Erlanger Research